Latest Rail News

28.09.16

Crossrail and HS2 part of ‘great opportunity’, Japanese investors told

Transport secretary Chris Grayling has promised the government’s continued support for HS2 and Crossrail during a trade tour to Japan.

Grayling attended the G7 Transport Ministers’ Summit in Karuizawa, Nagano on September 23-25, and also visited Tokyo to meet the city’s governor and Japanese transport and infrastructure investors.

Speaking at a reception at the British Embassy in Tokyo, he said that following the UK’s vote to leave the European Union, Britain wanted to “have a more global focus” and “strengthen ties” with trade partners like Japan.

“In total, our infrastructure programme to 2020 is worth over £100bn – and there will be lots more to come in the years that follow,” Grayling added. “That’s why Britain represents a great opportunity for Japanese firms.”

Clive Heaphy, HS2’s director of finance and operations, said in the past that he is “worried” about the long-term impact of the referendum on the high-speed rail project.

Significant figures including Lord Berkeley, the chair of the Rail Freight Group, and Sir Amyas Morse, the head of the National Audit Office, have also warned that there could be a shortage of funding for large-scale infrastructure projects, such as HS2, if the referendum leads to an economic downturn.

A recent report from the Public Accounts Committee said that HS2 has failed to provide a clear completion date for phase 1 of the project or a cost for phase 2.

Andrew Tyrie MP, chair of the Treasury Select Committee, has also written to Grayling saying that the government has failed to “comprehensively examine” the cost of HS2. Simon Kirby, the chief executive of the project, recently announced that he would be leaving the company to join Rolls Royce.

Despite this, Grayling told investors that work on building HS2 would start “next year” as planned. He also said that the Crossrail project would be complete in two years’ time, providing “a new, high capacity railway under London’s streets”.

(Image c. AP/Press Association Images)

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Comments

John Burns   29/09/2016 at 17:38

I can only see the Japanese wanting to supply the rolling stock. They do supply Hitachi trains to the UK. Investing in railway that few economists speak in positive tones of? Are the Japanese that stupid?

Ian   30/09/2016 at 16:37

I do find it odd that this amazing opportunity is being given such a hard sell by the UK government. Good business opportunities speak for themselves, and if it is so good for Britain, then why is it being pimped out at all? The more this goes on, the more it just looks like the UK Government is simply begging people to invest in us and no doubt, like Hinkley point, this will be at the harm to UK taxpayers.

Mikeb   30/09/2016 at 17:35

For some years, government ministers have been shuttling to and from Beijing in an attempt to persuade "cash-rich" Chinese businesses to invest in HS2 and other projects. Now, Japanese businessmen are also being targeted for the same purpose and I can therefore foresee a situation whereby HS2 might be built and operated by a consortium of Far East-led companies. It is a sad fact that British investors do not seem to have enough financial wherewithal to involve themselves in such large infrastructure projects and, to a great extent, we therefore have to rely totally upon inward investment in order to get things done.

John Jefkins   30/09/2016 at 18:57

Of course the Japanese are interested in investing or selling us trains to run on HS2. After all their own private high speed line Tokyo-Osaka line long paid back its costs from its PROFITS. John Burns is quite wrong about economists. Even the LSE economists quoted by StopHS2 say HS2 would boost the economy enough to earn around £1 billion extra tax per year (+ inflation) over its 100 year + life. That's £100b + inflation extra tax in addition to fare income, premium payments and other property rental income potential. And other economists estimated 6 times as much income. The key thing is to keep this profit in government hands. This will be a rather more profitable line than HS1 (as it links our 10 top cities rather than being just a cross border route). But like HS1 it needs to be long leased for increasingly huge rental fees over it's very long life. Those rental fees could repay construction costs in 25yrs and then repay them again (many times over) to the government owner. As with HS1, the government needs to retain the freehold.

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