High Speed Rail - Transport Committee Contents

Written evidence from Antony and Carol Chapman (HSR 51)


May I urge your Committee to look into the actual cost of the proposed HS2 scheme.

HS2 Ltd says that the cost of the first phase from London to Birmingham would be £17 billion. They describe this as being at 2009 values. They also say that this is the present value, but they refuse to say what the future value would be, that is the actual cash cost to be paid to contractors. It is impossible to have a present value without a future value from which it is derived.

Alison Munro, Chief Executive of HS2 Ltd, justifies refusing to give the future value/actual cash cost on the grounds that the Treasury does not forecast inflation for more than two years ahead, and that they have to rely on Treasury figures. It would be easy for them to carry out their own calculations, but they refuse to do so, or if they do, to make them public. However, for other aspects of the Business Case they forecast many years ahead, often forty years or more.

The important figure for the general public to know is the actual cash cost which would be paid to the contractors. A simple calculation shows that, assuming inflation of 3% per annum, this would be at least £23 billion for phase one, a significant increase on £17 billion.

HS2 Ltd says that the cost of phase 2, from Birmingham to Manchester and Leeds would be another £17 billion. On the same basis as above, and taking into account the much longer timescale, the actual cash cost paid to contractors would be in the region of £27 billion.

The total for both phases would therefore be £50 billion, not the £34 billion stated by HS2 Ltd. Thus the actual cash cost would be half as much again as the HS2 Ltd figures. These are highly misleading, and a serious misrepresentation, which I hope your Committee will rectify.

15 May 2011

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Prepared 8 November 2011