WE can try to get by with the existing routes from north to south, we can consign the next generation to overcrowding, standing up in the carriageways, or we can have the guts to take a decision - no matter how difficult - that will deliver prosperity to every part of the country.”
British prime minister, Mr Boris Johnson’s ringing endorsement of HS2, the project to build a new high-speed line from London to Birmingham and the north of England, in an address to parliament on February 11, finally brought months of debate over the controversial scheme to a head.
First proposed by the then Labour prime minister Mr Gordon Brown in December 2009 and supported by each transport minister in the five governments that have followed, HS2 has a chequered past. The costs have seemingly ballooned at every juncture: from £30bn when the project was first approved in 2010, to £38.4bn in 2013, £55.7bn in 2015, and most recently £80.7-87.7bn.
This is a staggering amount for what is after all just 338km of new railway. Deadlines have similarly been pushed back: from the start of construction in 2017 and the first trains running in 2025 at its foundation, to the current completion date of 2028-2032 for the first phase, and 2035-2040 for Phase 2a to Manchester and 2b to Leeds.
However, as Johnson was quick to point out, the project, in the government’s view, remains the best option to address capacity constraints, which hinder the performance of the existing West Coast Main Line (WCML).
“Poor management to date has not detracted, in my view, from the fundamental value of the project,” Johnson said. “The review recently conducted by Douglas Oakervee… leaves no doubt of the clinching case for high speed rail. A vast increase in capacity, with hundreds of thousands of extra seats, making it so much easier for travellers to move up and down our long, narrow country.”
While short of a U-turn, the feeling among industry observers was that the government was gearing up to ditch the project in autumn 2019. Key government advisors were openly hostile to a scheme described as a “white elephant.”
“Poor management to date has not detracted, in my view, from the fundamental value of the project.”Boris Johnson
A House of Lord’s Economic Affairs Committee had also published a report in May 2019 questioning the economic case for the new line. The panel said HS2 should not go ahead without a new assessment of its costs and benefits.
Despite receiving Royal Assent and becoming an act of parliament in February 2017, and work getting underway on enabling works later that year, in August 2019, transport secretary, Mr Grant Shapps, sanctioned the review.
He said that while the government backed transport infrastructure investment to drive economic growth, such investments must be subject to a continuous assessment of their costs and benefits. Shapps later confirmed that HS2 Ltd, the company developing the project, no longer believed that delivery was possible within the £55.7bn budget set at 2015 prices. He subsequently said that the expected cost was now £80.7-87.7bn at 2019 prices.
The review was led by Mr Douglas Oakervee, the former chair of HS2 Ltd. Oakervee was supported in his work by deputy chair Lord Tony Berkeley along with a panel of Ms Michele Dix, Mr Stephen Glaister, Mr Patrick Harley, Sir Peter Hendy, Mr Andrew Sentance, Mr Andy Street, Mr John Cridland and Mr Tony Travers.
However, there was soon discontent in the ranks. Berkeley, a former chair of the Rail Freight Group, and long-time critic of HS2, resigned from the review on October 31 and published a letter on November 13 which he had written to Oakervee expressing his grievances.
Berkeley complained of a lack of balance in the review’s findings and questionable practices adopted during the review process. He referred to the “often unquestioning acceptance of information provided by HS2 Ltd and a failure to scrutinise the involvement of HM Treasury and the Department for Transport (DfT) in the development of the project.” In particular, he says both HS2 Ltd and the DfT were reluctant to provide information backing up their forecasts of passengers/revenue and capital costs.
During a presentation to the High Speed Rail in the UK - HS2 and the Oakervee Review, Delivery Practicalities and the Future Direction of Government Policy conference held in London on March 10, Berkeley cited Oakervee’s reference to the project’s benefit:cost ratio (BCR), which offered a wider economic benefit ratio for the project of 1.1 to 1.2. However, he says this is based on an operating pattern of 18 trains per hour (tph), which he claims is unrealistic and is not operated by any equivalent high-speed railway in the world. If reduced to 14 trains per hour, Berkeley said the BCR falls to 0.6
“Normally this would cause the Treasury to reject a scheme as being bad value for money,” Berkeley said.
“People have lost sight of the purpose of it… I am not against HS2 as such, I am against the enormous cost and the fact I don’t think it delivers what is on the tin.”Lord Tony Berkeley
Berkeley subsequently published his own review. In the document he backs a plan to upgrade existing infrastructure, including four-tracking sections of the WCML and electrification of other main lines from London to the midlands and the north. The report says these improvements, as well as those offered by Northern Powerhouse Rail and Midlands Engine Rail, offer far greater benefits than HS2 to the areas that need improvements the most for around £74bn less than the £230bn cost if HS2 is included.
“It has been going on for 10 years, the costs have trebled,” Berkeley said. “People have lost sight of the purpose of it… I am not against HS2 as such, I am against the enormous cost and the fact I don’t think it delivers what is on the tin.”
Berkeley’s findings, while drawing favour from environmentalists and opponents of HS2, have been widely criticised in the rail industry. This includes former HS2 technical advisor and chief engineer, Professor Andrew McNaughton, who says Berkeley’s alternative suggestions are impossible.
Speaking to New Civil Engineer in January, McNaughton said WCML four-tracking was unachievable because of the proximity of houses to the line in some areas and that signalling systems could indeed support 18tph. The fact that it is not done elsewhere is because of bottlenecks at junctions and stations, which HS2 is designed to avoid.
The point of HS2
“The point of HS2 is not to build like we always have done for 200 years but to do something different that will improve the whole network for 100 plus years to come,” McNaughton said. “If it was possible to achieve the same benefits at a lower cost by upgrading the existing network, then it would have been done already.”
Similarly, speaking at the High Speed Rail in the UK conference, Mr Nick Bisson, director HS2 Phase 2 and NPR at the DfT, said that as part of the Treasury’s greenbook, the department has looked at alternatives to HS2 at every stage of the process.
“If you do everything you think of and growth continues at its current rate, you will still have used that capacity by the 2030s and you will still come back to say we need to build more tracks here,” Bisson said. “That fundamentally is what the decision to proceed with HS2 is about.”
The Oakervee Review also backs the construction of HS2 as there are no “shovel-ready” alternative investments in the existing network. The 130-page document was finally published to coincide with Johnson’s announcement. It states that the original rationale for the scheme - the need to increase the capacity and reliability of the conventional British network - still holds. The report advised the government to proceed with the full Y-shaped network to Manchester and Leeds and says failure to proceed would present “serious consequences” for the supply chain, the fragile construction industry and confidence in British infrastructure planning.
“If HS2 were to be cancelled many years of planning work would be required to identify, design and develop new proposals,” the review says. “The upgrading of existing lines would also come at a high passenger cost with significant disruption.
“The full network is needed to realise the highest value for money economic return on the investment of HS2. Phase 1 as a standalone scheme does not represent value for money, nor does building Phase 2 without building Phase 1.”
Oakervee’s findings are endorsed by a revised business case for HS2 Phase 1, published on April 15. The document updated the previous case published in 2013 and reaffirmed the strategic and economic case for the project. It also outlines how the scheme will deliver a positive return on investment and how introducing HS2 will result in an improvement to the annual subsidy-premium balance for Britain’s railways, benefitting the taxpayer.
The business case confirms the latest cost estimates for Phase 1 at £35-45bn, including contingency, with the government targeting delivery for £40bn. Phase 1 has a central-case BCR of 1.2:1. This increases to 1.5:1 when Phases 2a and 2b are included.
In addition, the business case finds that alternative interventions on the WMCL could accommodate expected increases in demand but would not provide a lasting solution. “None of the alternative schemes that have been examined are able to deliver the same kind of capacity benefits,” the report says.
On the same day as releasing the revised business case, the DfT issued a notice to proceed with detailed design and construction of Phase 1 to the four joint venture partners. The DfT says that at a time when the construction sector faces uncertainties during the coronavirus outbreak, issuing the notice to proceed provides a vote of confidence in construction companies and the wider supply chain supporting HS2.
Yet it is not going to be business as usual for HS2 Ltd. Johnson’s address included a commitment to reform the company as the government recognised that its failings had contributed to the explosion in costs. Johnson confirmed that the government will find alternative arrangements to deliver Phase 2b and the Euston station project.
“We will, in line with Mr Oakervee’s recommendations, be interrogating the current costs to identify where savings can be made in Phase 1 without the cost overruns and delays that would be associated with a detailed redesign so that the company can concentrate solely on getting phases 1 and 2a built on something approaching time and budget,” Johnson said.
Central to the government’s plan is the appointment of an HS2 minister to “restore discipline” to the project. Mr Andrew Stephenson MP was appointed on February 15 and he vowed to offer “forensic scrutiny” of the project. “We need to have a much better, improved approach from HS2 Ltd this time,” he told the New Stateman’s Northern Powerhouse conference in Manchester on February 27. “The company has a new budget for Phase 1 and now must deliver it. No ifs, no buts.”
Stephenson’s role also includes oversight of NPR and the Transpennine route upgrade as the government seeks to align the objectives and outcomes of these major construction projects in order to maximise benefits and reduce costs while speeding up delivery. Johnson’s address included a pledge to develop an integrated rail plan for the north and the midlands, High Speed North. The DfT confirmed on February 21 that it will publish the plan by the end of the year.
“The company has a new budget for Phase 1 and now must deliver it. No ifs, no buts.”Mr Andrew Stephenson, MP
There are also changes afoot at HS2 Ltd. The company confirmed to IRJ that CEO, Mr Mark Thurston, has identified serious challenges of complexity and risk in the project since he was appointed in 2017, and has overseen “significant changes” and improvements to the organisation, its governance, and its processes.
“We now have strong integrated project teams in place, linking HS2 Ltd closely with the joint ventures in order to encourage greater collaboration to drive efficiencies and share innovations,” the company said. “In preparation for the notice to proceed, HS2 Ltd redesigned its Phase 1 organisational structure to focus on delivery of the main works civils contracts and construction of the railway.”
Assessments of HS2 Ltd’s organisational capability and its readiness to issue the notice to proceed were provided by three lines of assurance, including an Independent Assurance Panel, in late 2019. A flurry of recent activity on the company’s job board is another indication of further change over the coming weeks and months.
However, the company still has a lot of work ahead if it is to bring the project under control and avoid further cost overruns, as a report from the independent National Audit Office, published in January, emphasised.
The report says both the DfT and HS2 Ltd underestimated the complexity and risk associated with the project. It adds that huge uncertainty remains around the DfT’s cost estimate for HS2 because 50% of the construction contracts are yet to be let.
As the NAO points out, the cost of building additional tunnels and cuttings to appease the concerns of local residents has pushed the cost up. Reports of over-engineering from contractors also hint at a project paranoid about future liability but with little concept on how this might impact upfront costs. Failures to communicate the benefits of the scheme to provide vital boosts in capacity rather than speed to the wider public as the rationale for spending such a huge sum have also, quite frankly, been abysmal.
Successive governments have though held firm, and consistently endorsed the project’s importance to reconnect and rebalance the north with the south. Now armed with a revised budget and new momentum from an administration seemingly intent on “getting it done,” spades are in the ground and work is pushing ahead. HS2 is, for now at least, well and truly back on track.
What is HS2?
HS2 is a 338km high-speed railway from London to Birmingham, Leeds and Manchester. Divided into two phases, Phase 1 comprises the 190km link from London Euston to a new station at Birmingham Curzon Street and Lichfield. Under plans announced by the government on February 11, the 69km initial section of Phase 2a from Lichfield to Crewe will now be included in Phase 1. The remaining 82km of 2a runs from Crewe to Manchester Piccadilly via Manchester Airport. Phase 2b runs for 198km from Birmingham to Leeds.
The current budget for Phase 1 is £35-45m with the DfT stating in the revised Business Case released on April 15 that it was targeting delivery for £40bn. The business case also states that the line will open in phases between 2028 and 2030, with the initial London terminus located at the hub at Old Oak Common to prevent identifying an optimised solution for Euston from delaying the project. Phase 2 is expected to cost a further £40bn although exact costs have yet to be confirmed. Delivery is scheduled for 2035-2040.
Phase 1 of the 360km/h railway is expected to carry 300,000 passengers each day and 100 million per year. Up to 18 trains per hour will operate on Phase 1, with the complete network set to serve 25 stations across Britain. Each train will have capacity for 1100 passengers.
Enabling works on Phase 1 got underway in spring 2017. Four joint venture contractors were awarded civil works contracts worth a total of £6.6bn in July 2017. The joint ventures and work responsibilities are as follows:
- SCS Railways (Skanska Construction UK, Costain, Strabag) - Area South: the London Euston tunnels and approaches, and the Northolt tunnels
- Align JV (Bouygues Travaux Publics SAS, a subsidiary of Bouygues Construction, Sir Robert McAlpine and VolkerFitzpatrick, a subsidiary of VolkerWessels UK) - Area Central: Chiltern tunnels and Colne Valley viaduct
- EKBF JV (Eiffage Genie Civil, Kier Infrastructure and Overseas, BAM Nuttall, Ferrovial Agroman), Area Central: North Portal Chiltern tunnels - Brackley and Brackley - South Portal Long Itchington Wood Green tunnel sections, and
- BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement). Area North: Long Itchington Wood Green tunnel - Delta Junction and Birmingham Spur Delta Junction - WCML Tie-In sections
Work underway on sites across Phase 1 predominately comprises enabling works to prepare for main construction, including archaeology and ground preparation in Birmingham; building access roads and bridges near the National Exhibition Centre (NEC) and M42; large compound preparation work at Streethay near Lichfield, Stoneleigh and Long Itchington; ecology work in Warwickshire and Buckinghamshire; site clearance at Calvert and the Chilterns south portal site; and demolitions to prepare for work to begin at Euston station.
In addition, HS2 Ltd says 350,000 new trees have already been planted along the route and 26 areas of new habitat created for wildlife. In total, 7 million trees will be planted and 33km² of new and existing wildlife habitat will be created and maintained during the course of Phase 1, a 30% increase compared with what is already in place.
With the DfT issuing a notice to proceed with detailed design and construction on April 15, attention is now shifting to the next stage of Phase 1. The notice is prompting contractors to set up numerous compound and satellite construction sites along the route. Work on complex and lengthy assets including tunnels using TBMs, viaducts and earthworks comprising both embankments and cuttings will commence in 2021-22.
Further contracts for construction of Birmingham Curzon Street station and Birmingham Interchange station and railway systems, including track and overhead lines, power supply and depots will launch later this year. HS2 Ltd says that as it finalises detailed designs for assets with the joint venture contractors over the course of 2020, it will be in a better position to provide more information about the size, scale and timeline of the construction programme.
The company adds that the estimated £2.75bn rolling stock contract for at least 54 high-speed trains for Phase 1 is likely to be awarded this year. Five parties were shortlisted for the contract in June 2019: Alstom, CAF, Siemens, Talgo, and a consortium of Bombardier and Hitachi. Siemens and Talgo have committed to building new factories in Britain to support delivery of the contract. CAF, Bombardier and Hitachi already have manufacturing sites in Britain.
The impact of Covid-19
WHILE the issuance of the notice to proceed is good news for the contractors working on HS2 as the project ramps up, each remains mindful of maintaining social distancing measures prompted by the Covid-19 pandemic.
HS2 Ltd says construction has been paused at some sites to safeguard the health and well-being of the workforce and the communities in which they are working.
“They may remobilise if our contractors are confident they can operate in line with Public Health England (PHE) and industry guidance,” an HS2 spokesperson said. “Those sites still working are doing so because they are confident they are operating within PHE guidelines, and will be monitored and remain under constant review.”