About the latest HS2 economic case

Numerous people have been looking closely at the documents released by the Department for Transport and HS2 Ltd, in an attempt to bolster the case for HS2.

Tomorrow, MPs will debate the High Speed Rail (Preparation) Bill, so please let them know what you think about Hs2 before hand. You can use the tool here, to make it easy to email them.

Headline points about the new HS2 case:

  • The Benefit Cost Ratio for Phase 2 includes numerous new dodgy assumptions, but has still fallen to 2.3, down from 2.5 in the previous case.
  • It dismisses alternatives, essentially on the grounds “they aren’t high speed rail”.
  • Many of the so-called benefits are still based on assumptions about (not) working on trains. The value of a business travellors time has fallen, but the new case assumes that a greater number of passengers on HS2 will be travelling for business.
  • It assumes HS2 train fares will be the same as conventional speed fares, even though it assesses the benefits to HS2 on the assumption that businesses pay more for faster journeys.
  • It includes scare stories of weekend engineering works to existing railways if HS2 does not go ahead, but ignores the huge disruption to rail passengers from building HS2, as well as any other maintenance and improvements that will be happening anyway. Building HS2 will involve massive disruption to the road and motorway network, but this has been glossed over, in the effort to sell HS2.
  • It refers to the discredited KPMG report, published in September but neglects to mention this report was based on the August 2012 HS2 economic case, and includes the Heathrow link. It neglects to mention that KPMG found many areas would suffer if HS2 was built, ranging from Cardiff to Cornwall, and Aberdeen to Brighton.

For more details see the following articles by journalists and economists, showing that even with the latest business case, more and more people are seeing through the HS2 spin:

Channel 4:  Fact Check: is HS2 value for money?

LSE blogs: Henry Overman: The Strategic Case for HS2

City AM: HS2 benefits downgraded again

The Guardian: HS2 figures threaten to derail DfT’s business strategy

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4 comments to “About the latest HS2 economic case”
  1. Just how many of our MPs really want hs2 when only half turn up and there leaders can not be bothered to attend to vote in the commons ? Don’t they realise people’s lives are in limbo with there project ,it’s about time one of the news papers ran a campaign against hs2 and just held the govenment to account like they did with the expenses scandals to show the public how they are wasting billions of pounds on a vanity project they only the PM wants

  2. David Cameron said on the news last night that the unions have gone to far in Scotland intimidating. Bullying holding people to ransom in the refinery dispute .Well David can you please tell me the difference between them and what you are doing to all the people along the. Hs2 route with your project ,it exactly the same .Holding MPs to blackmail if they don’t vote your way ripping people off the values of there homes along the route ripping our countryside apart spending. Our taxes on a vanity project no one wants except a few people in government you are exactly the same the sooner you are voted out the better off we all be

  3. The latest Economic Case ( also known as Jackanory 5 ) has lots of pretty graphs but is the same old twaddle. The case is based on “Transport User Benefits” of £ 59.8 bn which includes £ 31.0 bn of Journey time saved ( mainly business people at a reduced £ 32 per hour – still a lot of money when the alternative would have been get up an hour earlier ), £ 8.1 bn for “reduced waiting” and £ 7.5 bn for “reduced crowding”. There is also our old friend “Agglomeration” of £ 8.7 bn.

    In these straightened times of austerity and ever increasing national debt I would like to suggest the ” Hard Cash BCR ” comparing incremental Revenues less Operating Costs as a proportion of the Capital Cost.

    Jackanory 5 gives us the following for both legs together :

    Revenues £ 31.1 bn ( including a heroic 26 % making altogether new journeys and only 1 % and 4 % converting from air / car )
    Operating Costs £ 22.1 bn ( meaning even with the DfT passenger growth figures HS2 hardly washes its face going forward )

    Capital Costs £ 40.5 bn ( sorry haven’t yet worked out why this isn’t £ 42.6 bn – give me time )

    Giving me a HARD CASH BCR of 0.2 .

    HS2 may be a grand engineering project but there is no wonder that the guy from the LSE thought it gave a poor return.

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