HS2 will cost at least £107bn to complete and its business case is based on unrealistic claims about how many trains could run on the new line, according to the former deputy chair of the Government’s review into the scheme.
Labour peer Lord Tony Berkeley, a long-term critic of the high speed rail scheme, claimed in November that he had been sidelined from the review led by former HS2 Ltd chair Doug Oakervee.
Lord Berkeley has been an opposition transport spokesperson
He has now published his own dissenting report ‘since I disagreed with some of the conclusions of the draft Review and was not given an opportunity to amend it’.
In his report, he claims that ‘of the options considered in the Review, the base case for completing HS2 Ltd. is estimated to cost £107bn at 2019 prices’.
His most serious criticism is that ‘even before taking into account the much higher scheme costs, the ratio of benefits to costs in the 2017 case is totally false, based as it is on more trains than any other high speed line can operate, on higher speeds, and on trains running full all day with high fare paying passengers than any other high speed line can operate’.
Lord Berkeley states that his best estimate is that the HS2 project has a benefit cost ratio of ‘less than 1, possibly as low 0.6 and therefore ranks as poor value for money when using the Treasury Green Book’.
He argues that the scheme is based on a specification ‘which is unnecessarily high and expensive for the services needed and for a country much smaller geographically than France, Germany or Italy’ and in particular for 360/400kph, ‘higher than any other high-speed line in Europe or Japan’.
He suggests that reducing its specification could save £20bn, ‘but mainly on Phase 2B’, while beginning the southern end at Oak Common rather than Euston could save £8bn.
In addition, Lord Berkeley points out that HS2 Ltd plans to run 18 trains an hour in each direction, ‘when the company itself admits that no other such high-speed line is able to run more than 12 to 14’.
He adds that HS2 Ltd ‘then appears to base its forecast revenue and other benefits on this excessive specification to achieve benefits more than twice costs, according to the 2017 Economic Case, suggesting that the scheme provides value for money’.
As an alternative, he suggests that rail services in the Midlands and North can be improved by integrating the HS2 Phase 2B lines within the Northern Powerhouse area into the existing network, and improving the Network Rail lines in the Northern Powerhouse and Midlands Connect areas by quadrupling track to what it was before the Beeching era.
He states: ‘The aim must be to give these areas the same standard of commuting services as there is in the South East whilst, at the same time, improving the existing lines from London northwards. This option would save around £50bn compared to the cost of HS2.’
Midlands Connect director Maria Machancoses said: ‘Lord Berkeley’s suggestion that the Government should consider building only small sections of HS2 in the North of England shows a disgraceful ignorance of how important the scheme is to the Midlands. HS2 must be delivered in full.
‘Contrary to Lord Berkeley’s view that the benefits of HS2 have been overstated, I believe firmly that they have been vastly underestimated.’
A spokesperson for the Department of Transport said: ‘Lord Berkeley’s report represents his personal view.’
An HS2 Ltd spokesperson said: ‘There have been many individual views expressed about the HS2 project, however we await the publication of the Government’s official review.’
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