Making a business case for UK high speed rail 11 Sep 2013
Peter Kenyon, TunnelTalk
- In the face of growing criticism of the cost of the UK High Speed 2 (HS2) project, a new report commissioned by the Government claims that the business benefits will be up to £15 billion a year in increased productivity once the whole 560km of network is completed in 2033.
- The report, produced by consultant KPMG, commissioned by the Government Department of Transport agency HS2 Ltd, and unveiled by the Transport Minister Patrick McLoughlin during a speech at the Institute of Civil Engineers today (11 September, 2013), also claims that most of the economic benefits will be felt in the Midlands and northern areas of the UK.
- The £42.6 billion project (£10 billion more than first announced) would see a 400km/hr high speed rail link constructed between London and Birmingham (starting in 2017), followed by a second phase of line between Birmingham and Leeds and Birmingham and Manchester (starting in 2023).
- Project scope currently includes 56km of twin running, TBM-bored, tunnel, including continuous tunnels under London (one of 8km and one of 14km), one of 13.5km through an area of outstanding natural beauty in the Chilterns, one of 12km between Manchester Airport and the city centre, and a 4km tunnel under the rail-hub town of Crewe.
- "There have been repeated calls for a business case for the HS2 scheme focused on jobs, productivity and growth. KPMG's analysis forms a key part of that business case, setting out the economic impact across the country of the HS2 scheme," said Richard Threlfall, KPMG Head for Infrastructure, Building and Construction.
Government battles to prove economic case for HS2
- "The study shows beyond reasonable doubt that HS2 brings net benefits to the country of many times the scheme's cost. It shows the UK will be £15 billion a year better off with HS2, recovering the cost of the scheme within just a few years. Our analysis also shows that HS2 will significantly help counter the corrosive effects on our country of the widening north-south divide. There has been a long-running debate about "who wins" from HS2, the north or the south? The answer is both."
- The report is being issued at a key moment for the project, as the anti-HS2 lobby gains momentum. The respected Institute of Directors has labelled the project a "grand folly" following a survey of its members which showed that 70% felt the scheme would have no impact on the productivity of their businesses.
- The Government's own Public Accounts Committee, which monitors all aspects of public spending, has also criticised the project for being based on "fragile numbers, out of date data and assumptions that do not reflect real life".
KPMG reports spells out economic benefits of HS2 project
- But an HS2 spokesman said the latest research countered all economic fears about the project. He said: "This KPMG Report makes a hugely significant contribution to the progress of HS2. Increased rail capacity, with faster and more reliable connectivity, will contribute to the economy right across the UK. The North and Midlands are set to gain at least double the benefit for the south. There is now clear evidence of the economic boost HS2 represents in terms of jobs, productivity and growth. HS2 is the right project at the right time."
UK High Speed Rail 2 needs 56km of tunnels - TunnelTalk, January 2013
New 9km tunnel for UK high speed rail - TunnelTalk, April 2013
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