Written evidence from Andrew Bodman (HSR 002)
Summary
1. The latest version of the HS2 Economic Case published at the end of October 2013 still contains faults some of which have been pointed out in earlier versions. Some other shortcomings are detailed too.
2. My recommendation is to cancel HS2 now.
Overstated Benefits
3. The economic case still uses the basis that people do not work on trains and therefore any journey time saving results in added work (productivity). While the value of time has been changed, the principle that a shorter journey time leads to more worker output has not changed. It is well known that many people work on trains whether using a laptop, iPad, smartphone or simply reading documents. To continue to ignore what happens in the real world is absurd.
4. Previously the Department for Transport had anticipated that about 30% of HS2 passengers would be on business. National Passenger Surveys have regularly reported a similar proportion of business travellers on intercity routes on the West Coast Mainline (WCML), Midland Mainline (MML) and East Coast Mainline (ECML).
http://www.passengerfocus.org.uk/research/national-passenger-survey-introduction See Stakeholder Report
5. The latest HS2 economic case now anticipates a much higher proportion of business travellers than previously, e.g. 66% for London Manchester. Such a high proportion of business travellers is no longer in line with National Passenger Surveys.
6. The HS2 economic case for HS2 is still calculated on the basis that passenger ticket prices will carry no premium over those for classic rail journeys. This lack of premium ticket pricing in the DfT’s HS2 passenger demand modelling was strongly challenged by the Public Accounts Committee in 2012.
http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/464/12041801.htm See questions 42 to 50 and their answers.
7. Currently there is a 20% ticket price premium for Ashford to London travellers on HS1 compared to a classic rail journey. In Europe, the ticket price premium is typically 70%. Recently the Secretary of State for Transport was quoted as saying in the context of HS2, “If you turn up at the last minute, you are going to be paying a lot of money.” http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/10302224/HS2-Passengers-will-have-to-pay-a-lot-of-money-unless-they-book-ahead.html
8. If you take a 20% premium over Virgin trains for a return Birmingham London journey at peak times, you would theoretically have the following alternatives at 2013 prices:
Chiltern Railways £95
Virgin Trains £158
HS2 £189
9. Ticket pricing does have an effect on demand, and to construct a HS2 passenger forecast without a price premium leads to overstated level of passenger demand.
10. All of the factors listed above result in a grossly overstated amount of benefits. Independent bodies suggest a realistic benefit cost ratio for HS2 is 0.5, i.e. 50p back for every £1 spent. That would be unsatisfactory by Treasury rules as well as being an irresponsible use of taxpayers’ money.
Designed in Bottleneck
11. Many of the main rail lines serving London are close to the maximum number of train paths that they can accommodate at peak times. Ultra high speed trains require greater stopping distances than classic trains as a result of their greater kinetic energy. So an ultra high speed line can accommodate fewer trains per hour than a classic line. The UIC (International Union of Railways) has indicated that it is not safe to run more than 16 trains per hour at 350 kph.
See Figure 2
http://www.greengauge21.net/wp-content/uploads/Final-Report-Appendices-B-J.pdf
12. The indicative schedule for HS2 phase two shows 16 trains per hour planned for the Birmingham Interchange to the junction for the Heathrow spur section of the route. See figure 6-2 in PFMv4.3 Assumptions Report.
http://assets.hs2.org.uk/sites/default/files/inserts/S%26A%2020_PFM%20assumptions%20report.pdf
13. In addition there are tentatively two trains per hour to serve Heathrow. Lastly there are two more trains per hour to link with HS1 and presumably these go further north than Heathrow; this is in addition to the Old Oak Common service to HS1 service. So this shows that up to twenty trains per hour are intended on a section of line that can safely handle only 16 trains per hour. In other words there is an intention to spend £50 billion on a line that has no room for expansion seven years after it is built. The Victorians had considerably more foresight. Contractor Atkins was aware of this issue in 2008 and documented it in their report “Because Transport Matters”.
http://stophs2.org/news/7424-is-dft-misleading-us-part-2
Existing Commuter Overcrowding
14. However HS2 does not address the most pressing problems that the rail network currently experiences, which is that of overcrowded commuter trains. Over 120,000 rail passengers stand on trains during the morning peak three hours every weekday; DfT data for typical autumn day 2012.
15. The worst affected lines in terms of trains carrying standing passengers are those serving the following stations:
London Bridge 31,247
Waterloo 28,168
Victoria 14,337
Liverpool Street 12,205
Fenchurch Street 8,143
etc.
16. A Transport for London study in 2007 found that 85% of rail passengers travelling to London come from East Anglia and the South East.
17. In the last ten years there has been a far greater growth in rail passenger numbers in London and the South East than there has in long distance.
Rail passenger journeys (millions) | |||
| London and SE operators | Regional operators | Long-distance operators |
2002-03 | 679 | 219.2 | 77.2 |
2012-13 | 1032.9 | 341.1 | 127.8 |
Increase during ten years | 353.9 | 121.9 | 50.6 |
18. A growth of 353 million is seven times the growth of long distance passenger journeys.
http://www.rail-reg.gov.uk/upload/pdf/pass-rail-usage-2013-14-q1.pdf
19. Euston had just 2,821 standing passengers and the majority of these were on London Overground and London Midland trains. Virgin Trains carry just 2% of national rail passengers. So why build an ultra high speed intercity line serving the North West when its trains are some of the least overcrowded, the vast majority of travellers to London don’t come from that direction and the biggest growth of passenger numbers has been for commuters in the London area? The improved Thameslink service in 2018 will only address a small proportion of these overcrowding issues.
Disruption effects
20. While being ready to criticise alternatives to HS2 due to the disruption that they will supposedly cause, the DfT has not indicated how much disruption will be caused by the construction of HS2 itself.
21. The building of HS2 will cause very severe disruption at Euston for approximately 9 years. It is likely that Euston station will be closed for some weekends and for some bank holiday periods. The number of platforms serving classic rail will be permanently reduced from 18 to 13 and the number of approach tracks from 6 to 4. This will almost certainly reduce the peak time capacity of Euston on a permanent basis (for classic trains).
http://www.railnews.co.uk/news/2013/04/19-hs2-set-to-abandon-complete.html
22. There will be severe disruption in Camden. This will affect London Overground services which carry 25,000 passengers daily. It will also affect freight operations on the most important cross London freight route. It will also cause traffic chaos and seriously impact Camden Market. HS2 will also have effects on the existing rail network where it joins other routes such as at north of St Pancras (HS1), Old Oak Common, north of Lichfield, Crewe, near Wigan, Toton and Church Fenton.
23. In addition HS2’s construction will affect road users for an extended period with the need to cross the M1 (6 times), M42 (6 times), M56 (3 times), M6 (3 times) and M62 (2 times) as well as 47 crossings of trunk roads. To bring about its construction, many large trucks will be using any roads from motorways to narrow country lanes for several years.
http://www.cpre.org.uk/what-we-do/transport/rail/update/item/3391-striking-new-hs2-maps-launched
24. By contrast the 51M Optimised Alternative which does meet the DfT’s forecast passenger growth requirements (through an increase of standard class capacity on each train) would need work at just three points on the WCML. Grade separated junctions would need to be built at Ledburn and Colwich, and laying of additional track to increase freight capacity between Rugby and Nuneaton. For the latter, weekend services could be diverted via other rail routes while the work is undertaken. The 51M Optimised Alternative requires no disruption at Euston, Camden or the other places which will be affected by the construction of HS2. Talk of 14 years of weekend working is nothing other than unfounded scaremongering. A journalist can see through that deception.
Omissions
25. It has been estimated that HS2 will provide an extra 10,000 passengers per hour into the Underground network at Euston in addition to the existing 7000 per hour at peak periods. Source: Section 3.6, (page 20) HS2 Ltd Route Engineering Report.
(This appears to be no longer available on the internet, although I still have a copy)
26. As is well known, the Underground is another British railway system that is very short of capacity at peak times. To more than double the demand at Euston without providing additional Underground capacity is unworkable. As Transport for London has pointed out, it will require the building of Crossrail 2. This has not been included in the HS2 budget.
Regional Regeneration
27. Several independent people or organisations have studied the regional effects of high speed rail in other countries. Professor Tomaney provided comprehensive oral and written evidence to this committee in 2011 on the subject of high speed rail. His views were that the amount of regional regeneration being created would be small, and if it did exist then the regional beneficiary would be the capital, in this case London. Other independent studies of actual evidence have reached similar conclusions.
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/1185/11071201.htm
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/writev/rail/m14.htm
Debt and Subsidy
28. The UK has a national debt of approximately £1.2 trillion. Network Rail has a debt of £30 billion which some expect to rise to £50 billion by 2020.
29. The debt that China has incurring in building its high speed lines reached US $ 640 billion by the end of 2012.
30. Zhao Jian, a professor at Beijing Jiaotong University, said he worries that the cost of the project might have created a hidden debt bomb that threatens China’s banking system. “In China, we will have a debt crisis — a high-speed rail debt crisis,” he told the Washington Post. “I think it is more serious than your subprime mortgage crisis.
http://factsanddetails.com/china/cat13/sub86/item1848.html
31. Japan was the pioneer of high speed rail in the 1960s but within two decades had accumulated massive debts. The system was privatised and the $280 billion debt was transferred to the taxpayer and is still being paid off. Apparently four of the seven operators are still government owned, and it is thought that the privately owned operators receive concessionary usage fees. In addition, the three private operators receive another $2 billion annually from the government. These subsidises are needed despite Japan having the highest rate of rail use in the developed world.
http://www.cc-hsr.org/assets/pdf/bnote-10.pdf
http://www.policymic.com/articles/1512/high-speed-rail-hardly-an-investment-in-future
http://www.heritage.org/research/reports/2010/03/america-s-coming-high-speed-rail-financial-disaster
32. The French accounting system treats taxpayer subsidies as “commercial revenues”. So the French programme’s $1.75 billion “profit” occurs through a $10 billion annual subsidy according to a study by Amtrak in 2008. The national rail infrastructure assets were transferred to Réseau Ferré de France (RFF) in 1997. Between RFF and SNCF there was an accumulated debt of €38 billion from building lines for the TGV by 2011. To deal with this debt, RFF is expected to increase track fees by 40% between 2008 and 2012 to reduce this debt. SNCF has threatened to cancel low ridership routes and has indicated that its reduced profitability will make it impossible to renew its 1981 fleet of TGVs before 2020. TGV fares are being increased by more than twice the rate of inflation and in some cases even more.
33. It is understood that Spain spends nearly $3 billion on high speed rail subsidies annually and Germany more than $1 billion per year. We also know that the high speed line between Amsterdam, Rotterdam and Breda (in the Netherlands) was saved from bankruptcy with a £250m government bailout. It had been losing £320,000 per day due to disastrous levels of patronage.
http://capoliticalnews.com/2012/04/15/grimes-new-high-speed-rail-biz-plan-crashes-into-reality/
http://money.cnn.com/2009/06/10/news/economy/high_speed_rail/index.htm
34. This over-estimation of passenger demand leads to debts and subsidies being required from governments. In July 2010 a World Bank report cautioned that governments planning high-speed rail
systems: “. . should also contemplate the near-certainty of copious and continuing budget
support for the debt”. See summary page 1.
35. Some countries have seen the light; Poland has decided not to build a high speed rail network, Portugal has abandoned plans to build three high speed lines one of which would have linked to Spain. In June 2013, France shelved all TGV projects not currently under construction for 17 years.
http://www.railwaygazette.com/nc/news/single-view/view/polish-high-speed-rail-project-cancelled.html
http://www.theportugalnews.com/news/high-speed-rail-u-turn/27691
Adverse effect on classic rail
36. The president of the SNCF, Guillaume Pépy thought that France was going too fast in its further construction of high speed lines. TGV fares have increased by 100% in the last decade compared to about 30% for car travel. Pépy went on to say: The whole basis of the high-speed rail revolution – that the TGV should be the "normal" means of travel, not just something affordable by the business elite – is under threat. The SNCF president also described the state railways as: Decaying... facing a financial impasse... and heading for the wall. He should know better than most.
37. Millions of people using commuter lines every day, particularly around Paris, have suffered years of overcrowding, dirty trains and unreliable lines. Pépy said there is an urgent need to increase capacity on these lines. Following a fatal rail accident outside Paris in July 2013, the Transport Minister Frédéric Cuvillier commented that regional lines had been underfunded for many years as investment went to high-speed lines.
http://www.ft.com/cms/s/0/622bcdc2-779a-11e2-b95a-00144feabdc0.html
http://www.thetimes.co.uk/tto/news/world/europe/article3816469.ece
38. While significant spending for rail is planned in the UK for Control Period 5 (2014 – 19), there is nothing to say that such a level of spending is affordable on an ongoing basis alongside HS2. It should not be forgotten that our classic rail will continue to transport most of our rail passengers; such lines need regular maintenance and many parts of the country seek further enhancements e.g. electrification from Bristol to the South West.
About the author
39. I have been studying High Speed Two in fine detail for more than two years. I live at least 16 miles from the proposed route. I am a director of HS2 Action Alliance and a member of South Northants Action Group. This submission is my own and is not on behalf of any other organisation.
40. I believe HS2 will not address the most pressing issue of overcrowded commuter trains to the south and east of London. If the Government is determined to increase the capacity for users of the West Coast Main Line, then it should adopt the 51M Optimised Alternative which is far cheaper, can be introduced much sooner and with less disruption than HS2. There is no logical basis for spending £50 (+) billion to supplement the capacity of a line which carries just 2% of our rail passengers and does not have the standing passenger issues which many other lines have. How will HS2 be helping the other 98% of rail travellers? HS2 is a totally ill conceived project and many people have not even studied the finer details. If they did, they would understand its many fundamental shortcomings.