High Speed Rail - Transport Committee Contents

Written evidence from Janusz Rawicz-Szczerbo (HSR 195)


Perhaps I should start by explaining my competence for criticising the business case for HS2.

Apart from my professional engineering qualifications listed above,[467] I started my industrial career as an engineering Apprentice working on the factory floor, and retired as Chief Executive of a substantial and successful Group of light engineering companies, having worked in the North, the Midlands and London. Subsequently I held non-executive directorships in two large quoted companies and acted as Chairman of certain of their Subsidiaries, as well as being Chairman of three management buy-outs and one buy-in. I also started and still own a small private company.

One of the essential practices in all the companies I managed and which underpinned their profitability and success, was the securing of maximum value for money in product design, manufacturing processes, purchasing and above all ensuring the optimum value of our products and service for our customers.

Applying this principle to the HS2 Project shows that it clearly fails in a number of areas.


The "customers" in this case will be the tax-payers who will be required to fund the £30 billion cost of construction (estimated at £1,000 per household) and subsequently subsidise the operation.

As clearly some 99.9% of them will never use it, this is of no value to them.

Reading the revealed comments attached to the 46,467 people from the South coast to Scotland (so far, increasing daily) who have signed the petition to abandon HS2, all object most strongly to what they perceive as a colossal waste of money and resources, which they wish to be put to better use.


Mr Cameron has claimed that a 250 mph rail link with the North will reduce the "North-South Divide" and has publicly asserted twice that "HS2 will go ahead", and this first before the much publicised and highly expensive (and unnecessarily complicated) Consultation process had even begun and then in the middle of it. This, of course, begs the question of its true purpose and validity. Unfortunately some now begin to suspect it as a smoke-screen for a firm decision already taken.

However, elementary common-sense suggests that if you improve the communication between a smaller region and a much larger one, the "gravity" of the latter will pull business and people to it at the expanse of the former.

This has been amply demonstrated in practice by extensive studies of the results in various countries of this effect. Interestingly, DfT's own projections show that some 6 out of 10 jobs created will be in London. And I suspect that is just another understatement.

Consequently the REAL effect will be to INCREASE the North-South Divide by making commuting to London from, eg Leeds, more attractive, thereby encouraging the most entrepreneurial, ambitious and able to move and work in London, and so denude the North of their capabilities and contribution.


Is there a benefit to business travellers from a 20 minute shorter train journey time—as claimed for HS2? The short and long answers are "No" and "Absolutely Not" (see next section).

Even if there was—is an expenditure of £30,000,000,000 justified just to save 20 minutes to the outskirts of Birmingham (then requiring a transfer to another link to the City centre, taking how long? Not specified …)

As against a journey targeted by Virgin Trains to be only 10 minutes longer direct to New Street Station (in the centre) with a range of connections to other destinations on the spot? Effectively a faster and more comprehensive service.


Mobile telephone technology now allows voice, messaging and e-mail communication while on the train, as well as internet access. So the time spent on a journey need not be wasted—thus removing one of the main arguments in support of HS2 for business.

In addition, Skype software applications for iPhone, iPad and iPod allow Skype-to-Skype voice and video calls, (using Voice over Internet Protocol [VOIP]) enabling voice and even video conferencing with several colleagues and business contacts.

(My son, who runs a high technology business, already uses the train as an extension of his office by using these facilities. He is not alone in this—everyone can do it.)

One can only conclude that the assertion by the DfT that journey times are a waste and a hindrance to business is either a result of profound ignorance of these capabilities or deliberate obfuscation, thus inevitably casting doubts about the reliability of any other of their assumptions and forecasts underpinning their case.

Surely it makes much greater sense from a business point of view to invest much more cheaply in more or longer trains and make business use even easier by providing free internet connectivity? Some trains are already internet enabled but at an extra price. Also improve the interior design of carriages to make it easier to set up and work with a laptop/iPad/iPhone?


The preamble to the Consultation Document states the following:

"While the Department of Transport (DfT) has made every effort to ensure the information in this document is accurate, DfT does not guarantee the accuracy, completeness or usefulness of that information and it cannot accept liability for any loss or damages of any kind resulting from reliance on the information or guidance this document contains."

This really says it all. The business case for HS2 relies on forecasts of traffic and usage up to some 75 years ahead. This is not only ridiculous, but thoroughly unprofessional, especially as a close look at the DfT calculations and assumptions reveals that the most optimistic scenarios have been chosen and the lesser ignored. In fact, their estimate of future demand for travel is several times higher than other rail industry forecasts, but these have not been factored in to provide a balanced range of financial outcomes.

In other words, the DfT presents a wholly unbalanced prospectus, on the basis of which, and on the caveat about the accuracy etc of the information in the above preamble, we are as taxpayers asked to commit £30,000,000,000 to a wholly unnecessary and useless project, whereas very much cheaper and more efficient alternatives such as the RP2 progressive enhancement to the current network, are available much more quickly and are more socially, economically and environmentally sustainable. They will also allow costs to be controlled in line with actual demand and generate much larger benefits for the costs incurred.

Throughout my long business career we exercised very detailed budgetary control, with annual budgets and detailed monthly management accounts. The budgets were both a performance target and a cost-control mechanism. The target was developed after detailed study of all relevant market conditions, and was intended to be realistic. Only one thing was certain—it would prove to be wrong—and we would perform better or not as well depending on external and economic factors. But costs were controlled as we went along and the results were always satisfactory.

We did once consider a five-year plan but dismissed it as basically irrelevant. To base the DfT prospectus on estimates of load and traffic factors and public travelling intentions some 75 years ahead in order to justify this expenditure and claim that a good return on investment would be obtained is sheer fantasy. A weather forecast would probably prove more accurate.


We do not have to look very far. The original case for HS1 has proved so far off the mark that it has recently been sold at a fraction of the original investment, having consistently made a loss. Why should we trust the same people to make a more believable case for HS2?

The Dutch HS Rail is making losses and I understand is liable to be declared bankrupt. Major problems have also been encountered by HS Rail in China and Spain. All result from excessively optimistic projections, not borne out in practice and with prosperity increasing in the bigger cities at the expense of the smaller. A third of France's existing high-speed lines lose money, and as a result inevitably less money is available to spend on maintaining the rest of the railway system, which is degenerating.

Can we not learn from this?


The proposal to have up to 36 electric trains per hour between 5.00 am and midnight travelling at 250 mph will require a tremendous amount of power. This will not be available from current generating capacity so additional capacity will have to be provided. I have not seen any DfT estimates of the amount and of the costs of building or extending power stations and these presumably have not been taken into account. They could be considerable and must be included in the assessment of the case for HS2. (Wind farms will be irrelevant.)

I recommend that you should consider the summary of an extensive assessment of the energy implications of HS2 on: http://www.voxopp.org.uk/449/where-will-the-electricity-come-from/

I have also not seen a breakdown of the £30 billion estimate. Is this only the cost of constructing the line? What is the cost of all the trains and has that been included? What are the running costs, namely payment for the electricity consumption, staffing, maintenance of track and rolling stock (very high wear at those speeds both of the track and the wheels, motors, brakes, overhead cables, collectors etc) depreciation and so on? What effect will these have on ticket prices at the DfT's expected numbers of passengers per annum? Alternatively, how many passengers will be required at the projected ticket prices, assuming these will be competitive to attract the passengers in the first place? And is this a realistic number? Will interest be paid on the money invested or is this a write-off? How much subsidy is envisaged? Will the sum of all these items make commercial sense?


Need one ask? A bite at the £30 billion pie is irresistible to the construction industry, and the suppliers of equipment, catering and even portaloos. It is significant, however, that none of these self-interested parties are proposing to contribute any cash or make an investment.


From a business and any other relevant standpoint, this gross expenditure is not in any way justified and the project should be cancelled forthwith, thus saving the bulk of the HS2 Ltd development budget of some £1 billion currently committed.

July 2011

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Prepared 8 November 2011