Warning that HS2 costs are out of control and the project needs a major rethink

Thursday, May 16th, 2019 8:04am

The costs of the HS2 rail service appear to be out of control and it should not go ahead without a new assessment of the business case, according to peers.

The House of Lords Economic Affairs Committee says it is is "far from convinced" the £55.7bn budget is realistic and that major changes should be considered to keep costs down.

When completed, HS2 will connect London, Birmingham, Leeds, Manchester, Liverpool, Sheffield, Edinburgh and Glasgow with up to 18 trains an hour at a top speed of 225mph.

Phase one between London and Birmingham is due to open in 2026.

The committee says spending could be reduced by cutting speeds and reducing moving the London terminus.

And it says boosting the economy of the regions would be better served by starting construction in the North instead of the South and by building the Northern Powerhouse Rail scheme at the same time.

Committee chair Lord Forsyth said commuter services in the north of England are "badly overcrowded" and the region is being "short-changed" by existing plans.

He said: "The costs of HS2 do not appear to be under control.

"It is surprising therefore that the Government has not carried out a proper assessment of proposals to reduce the cost of HS2 - such as lowering the speed of the railway or terminating in west London rather than Euston - which the committee recommended in 2015.

"A new appraisal of the project is required. If costs overrun on the first phase of the project, there could be insufficient funding for the rest of the new railway.

"The northern sections of High Speed 2 must not be sacrificed to make up for overspending on the railway's southern sections."

The committee's concerns have been echoed by former HS2 chairman Sir Terry Morgan.

Sir Terry, stepped down after only four months in the job last year, at the time as he resigned as chairman of the Crossrail project. That scheme is hundreds of millions of pounds over budget and months behind schedule.

On HS2, he said: "I think the triangle of scope, cost and time - something has to give."

Responding to the Lords committee report, an HS2 Ltd spokesman said: "HS2 will generate around £92bn in benefits to the UK economy".

He added: "We are determined to deliver a railway that is value for money for the taxpayer and a project that will reshape the economic geography of the country.

"We have strengthened our controls and are actively applying lessons learnt from recent infrastructure projects to ensure we have the most cost-effective approach."

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