Written evidence from David Miles (HSR
84)
THE PROPOSED BUILDING OF THE HS2 RAILWAY
THE BUSINESS
CASE FOR
HS2
HS2 is not a sound investment. Commercially it loses
money. It costs £25.5 billion, but only generates £15bn
of extra fares. So Government turn to cost benefit analysis (CBA)
to justify the expenditure.
The CBA claims its value for money (NBR of 2.7).
But it's based on heroic assumptions that underpin excessive demand
and illusory benefits, with a flawed assessment of the alternatives
to HS2.
On demand:
— A huge
increase in rail demand, some 267%—over 3½ times more
than now. DfT both ignore the evidence of demand saturation for
domestic travel generally and that the engine for rail growth
is modal substitution.
— DfT's
underlying model assumes a relationship with GDP that no longer
exists (and not just in the UK).
— DfT
use out of date data that inflates forecast demand, ignoring recent
analysis that give lower growth factors.
— Projected
demand takes no account of new technology or Government's own
initiative to reduce travel.
— Domestic
air travel is overestimated given the trends, inflating air modal
shift numbers (and carbon impacts).
— Car
occupancy assumptions are too low which overestimates potential
gains from cars.
— Despite
obvious uncertainty only a single case for demand is presented,
instead of a range of scenarios.
— The
effects of competition (from classic rail) are assumed away despite
the devastating consequences of inadequately anticipated competition
for HS1, and Channel Tunnel.
On benefits:
— Biggest
benefit wrongly assumes businessmen don't work on trains—so
30 minutes saved adds 30 minutes productive time.
— Using
10 year old data assumes top draw earnings for rail business travellers
(£70k per annum in current money) unadjusted for a nearly
fivefold increase in journeys by 2033. HS2 represents a regressive
subsidy.
— The
£5 billion overcrowding benefits depend on implausible levels
of crowding if HS2 does not happen.
On alternatives:
— HS2
is assessed against a "do minimum" scenario that is
an unrealistic alternative as it can not accommodate forecast
demand (because it takes no account of overcrowding and its effect
on choking demand growth).
— DfT's
own alternative (Rail Package 2) is ignored despite meeting demand
with less crowding than HS2, being cheaper (£2 billion),
better VfM (NBR 3.63), and delivering benefits incrementally,
unreliant on long term forecasts.
— DfT
justify rejecting RP2 on the basis it does not provide the surplus
capacity that HS2 provides.
— 65%
more capacity can be created on WCML with more rolling stock and
hence without material disruption.
On the recently claimed transformational benefits
(to redress the north/south divide):
— Wider
economic impacts are already assessed in the business case, at
just £3.6 billion—only 11% of HS2 benefits.
— Any
additional economic growth from faster connectivity assessed by
Imperial College is small (£8/10m/a).
— The
redistributive effects will benefit London, UK's dominant city,
not the regions. DfT assume trips to London grow at twice
the rate as those from London, and with 70% leisure travellers
the result is obvious.
— HS2
Ltd say biggest regeneration opportunity is Old Oak Common (not
outside the M25, or even the N Circular).
— Respected
experts say there is no evidence base to support such claimed
benefits (Overman, Tomaney).
All this ill befits a government overseeing spending
cuts of unprecedented severity.
To solve rail capacity issues does not require a
new £30 billion+ railway. Instead of spending £0.75
billion this parliament on planning for HS2 it could have a complete
but unglamorous solution for £2 billion.
Government first focused on HS2 as part of the low
carbon economy (although even HS2 Ltd says it is "broadly
carbon neutral"); then the spotlight moved to its business
case (but increasingly found it holed below the water line); it
appealed to catching up with our EU partners (but little has changed
since Eddington, we still have faster connections between our
key centres); most recently it is economic transformation and
breathing economic life north of the M25.
But moving the goalposts is a poor smokescreen to
cover an ailing business case, failing to disguise that HS2 is
a terminally anaemic white elephant.
These cost figures do not include the cost of blight
compensation, compulsory purchase, new rolling stock and the development
of a new generation of engines and rolling stock!!!! There has
been no cost calculation for the additional electricity generation
required or where these capital assets will be located. As one
living close to the proposed route I am also concerned that compensation
for "loss" will be restricted to property value and
not even go near to quality of life or disruption during construction.
The Secretary of State for Transport has said that compensation
payments will be better than ever before, but has not published
what these will be.
How can an economic argument be put forward in favour
of HS2 when so many questions remain not only unanswered but also
un-costed.
Such a huge financial commitment needs to be based
on a certainty that it will provide national benefits and that
those funds cannot be used better in other ways. Parliament needs
to satisfy itself that HS2 will lead to significant economic activity
in excess of its costs and that it will provide environmental
benefits including dramatically reduced emissions of greenhouse
gases. How it can do this with no stations en route is to say
the least baffling.
A new high speed network would bleed the rest of
the railway of money and care. What travellers want are boring
unglamorous improvements to the services we actually use. This
can be better accomplished with greater access to "all"
the population by improving the existing corridors.
— HS1
network has already been shown to only be worth 60% of its costs.
The rolling stock and train length levels have been cut and new
trains cancelled as a result of inadequate demand. This on a line
that DOES have stations.
— No
weight is given to the importance of IT, which will result in
a dramatic decline in the need to travel for both business and
social purposes.
— HS2
Ltd has assumed that time on a train is wasted and therefore there
is a monetary value assigned to time saved for all travellers.
In reality most travellers make good use of time of a train especially
for business purposes—it is not wasted.
— The
value assigned to that time saved is exaggerated by HS2 Ltd and
is equivalent to the average business traveller earning £70,000
per annum in today's prices. This is clearly an overestimate of
150%! Research has shown that passengers want reliability and
value for money much more than high speed.
— Faster
journey times will only lead to people staying in bed longer in
the mornings, not getting to work earlier, so no economic benefit
there.
— Traffic
and volume can be increased in existing corridors at seriously
less cost, with the advantage of stations en route. These alternatives
are of so much more benefit to the whole country but HS2Ltd ignores
these economic issues as it has only one remit, therefore it can
only be biased.
— Using
existing corridors will also significantly reduce the impact of
the incredible noise levels projected for these trains. The HS2
Ltd noise survey has only been modelled using both the time trains
are passing and when they are not so that it can demonstrate "acceptable"
levels. This is nothing less than a "swindle" and you
as a leader of this country cannot be seen as part of this. There
is political expedient and there are down right lies!
— HS2
Ltd believes that an additional 135,000 passengers per day will
use the line (existing usage of the West Coast Main Line is 45,000
per day) just because it exists. This is not sustainable argument
and is wholly unproven, especially in an era when energy saving
should be an every day habit.
Is High Speed Rail Environmentally Friendly?
— According
to HS2 Ltd, HS2 will not reduce overall carbon emissions and will
be carbon neutral at best. Even assuming there will be an increase
in renewable energy production this will not create the low carbon
economy claimed. It is much more likely to generate a net increase
in carbon dioxide emissions.
— The
number of passengers switching from planes to HS2, according to
HS2 Ltd will only be 3.5 million per annum—less than 7%
of all passengers using HS2 and less than 5% of all passengers
using Heathrow. There is evidence that domestic flights to London
have been in decline for several years. Therefore the "green"
argument for masses of travellers switching to train is nonsense.
— The
modal shift from cars and planes to trains will be small. Fewer
than 2% of those driving on the motorways between Birmingham and
London will switch to HS2. So what and who is this railway for?
— HS2
Ltd. assumes a worst case scenario for aviation emissions, when
the CAA expects aviation emissions to show a significant improvement
by 2030. If domestic flights are displaced by long haul flights
HS2 will have triggered an increase in aviation emissions. This
is a blatant attempt to load the dice in favour of a dream and
the earning of the major contractors who will be involved.
— The
carbon emissions generated by the construction of the line are
significantly underestimated—the quantities of concrete,
steel and stone required by HS2 will be colossal. So when will
these emission be offset, 100 years?
— The
energy used by high speed trains will be at least double that
of existing inter city electric trains. If HS2 reaches speeds
of up to 400 kph they may use more than four times the energy.
Where is this coming from?
— HS2
Ltd believes the demand for through trains to the continent from
north of Birmingham will be very low. This is consistent with
the low numbers using the Eurostar services, which have stagnated.
It will not significantly reduce the demand for short haul flights
to the continent. According to the rail industry itself any journey
taking more than three and a half hours is more likely to be taken
by plane than train. So where is the economic argument in favour
here.
— The
countryside will be permanently damaged all along the line including
the nationally protected Chilterns Area of Outstanding Natural
Beauty. It calls into question why these areas are given a special
status if they can be so badly damaged by the government. How
will the economic "benefit" be attached here.
Just in case you need reminding. There will be 14-18
trains per hour in each direction (28-36 trains in total). Operating
hours for line are 5.00 am to midnight. Maintenance overnight.
Noise levels will be 95 decibels at 25 metres (Health & Safety
requirement to wear ear defenders at 85 db.) Trains will run at
up to 360km/h (225 mph) with ultimate speed planned of 400km/h.
Trains will be 400m long. Therefore noise will just about be continuous.
How to you place an economic value to this?
HS2 is a delusionary dream with no real economic
benefits. Politicians are not supposed to be dreamers.
21 March 2011
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