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15.11.18

Building new city-centre lines instead of using existing network inflates HS2 cost by 15%

HS2’s second phase will cost more compared to similar overseas schemes because it relies on new dedicated high-speed lines into city-centre terminal stations at Manchester and Leeds rather than using the existing conventional railway.

In a long-awaited PwC review of the project’s costs, which was completed in 2016 but left unpublished until this week, investigators concluded that HS2 cannot save money linked to Phase 2’s stations without “fundamentally changing” its strategic objectives and business case.

“Like the railways in China and Japan, HS2 Phase Two is defined as a dedicated network. Constructing dedicated high-speed lines into city centre stations in Manchester and Leeds, to achieve the required journey times and capacity, increases costs when compared with some international schemes,” the report explained. “A number of comparators in France, Italy, Germany, Belgium and the Netherlands use existing railways and stations to serve city centres with high speed services.”

The study discovered that some comparators have been able to share railway connections with other services, even with high-speed train frequencies above the levels currently proposed to serve Manchester and Leeds, while others have taken extra steps to remove slower services from existing lines in order to release capacity for new services.

“During this study, HS2 Ltd expressed that taking a similar approach is not considered viable due to there being insufficient capacity in the existing conventional network, and the need to meet journey time and reliability requirements,” PwC said.

“Benchmarking supports this view, indicating that the approaches to stations and platforms are more constrained in Manchester and Leeds when compared to many European cities, based on current service demands. These challenges will be further increased if the forecasts for significant growth in regional services materialise.”

The location and complexity of intermediate stations in urban or semi-urban places, and the number of platforms required to service demand, also put up capital costs against international schemes that tend to place intermediate stations in more rural areas.

Overall, this drives a cost difference of 15% when compared to an unnamed but similar European high-speed line.

Across other areas, the report concluded that HS2 Ltd could save almost 30% in costs, particularly by addressing supply chain inefficiencies by consolidating the currently fragmented market.

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