Thursday, 18 December 2014

CP5 cost crunch reinforces HS2 case

Concerns about the cost and complexity of the Great Western Route Modernisation echo the problems of the incremental upgrading on the WCML. Photo: A Benton
In July 2011, then Transport Secretary Philip Hammond went to London’s Paddington station to formally launch the start of a £5bn programme to modernise the Great Western Main Line, including electrification, remodelling of the bottleneck at Reading and resignalling with the latest ETCS in-cab train control equipment.

But by the middle of last summer, train operator First Great Western was running a high-profile advertising campaign, adorned with images of Isambard Kingdom Brunel, which touted a ‘massive’ £7.5bn investment by Network Rail in the route. Yet when newly-appointed NR Chief Executive Mark Carne spoke to parliament's Transport Select Committee on June 9 last year, he was forced to admit that he ‘did not have a fully-defined cost’ for the investment programme.

Some details of the problems are starting to emerge, and it is already apparent that other enhancements to the conventional rail network are also imperilled by a spiralling cost control issue. According to reports last August by The Sunday Times newspaper and industry newsletter Rail Business Intelligence, the cost of electrifying (some of) the Great Western Main Line has already grown from £1bn at the outset to £1.5bn as detailed design work has proceeded. Industry insiders suggest that other wiring schemes, covering the trans-Pennine and Midland Main Line routes, could be similarly affected.

This salutary tale ought already to bring back memories of Railtrack’s ill-starred efforts to modernise the West Coast Main Line from 1998 onwards at a supposed cost of £1.4bn. The out-turn cost was more than £9bn by the time of the project’s formal completion, but another £1bn has been spent subsequently on improving the resilience of the route. For the avoidance of doubt, NR is doing and will continue to do a vastly better job of managing Britain’s rail infrastructure than Railtrack ever did. But there is equally no doubt that that the cost and complexity of upgrading legacy railways to deliver more capacity is continually and routinely downplayed.

It is remarkable that the GW programme’s budgetary transition from £5bn to £7.5bn to ‘unknown’ in just three years appears to have been somewhat blithely overlooked. Claims that there are a plethora of ‘cheaper and easier’ alternatives to the High Speed 2 project remain common currency, despite the emphatic passage of the HS2 Phase I hybrid bill through its second reading in parliament earlier this year. In reality, the overwhelming body of evidence is that the true ‘blank cheque’ rail projects are those ‘patch and mend’ options which this blog has always insisted are unsuitable for the busiest rail arteries.

The limitations of the incremental upgrading are especially acute where there is need to deliver real-terms increases in capacity. Despite the now familiar wrangling about load factors (the relevance of which has been dented by the metric being ignored in Sir Howard Davies' aviation capacity reports), this in practice almost always means more train paths, whether for passenger or freight. It cannot be right that this is achieved overwhelmingly by ‘robbing Peter to pay Paul’. On the upgraded WCML for example, paths are so scarce that an engineering-led scheme to raise the maximum speed of commuter trains to 110 mile/h was required to flight an extra train per hour to and from London Euston between Virgin Pendolinos. And to that extent, it worked. But the unintended consequence was to deprive Watford of the direct services to northwest England which it had enjoyed throughout the 20th Century. Whatever advantages this confers, improving non-London connectivity is clearly not one of them.

On the Great Western meanwhile, whatever improvements are made to the main line to Bristol and south Wales (note that the ‘Berks & Hants’ line route to Devon and Cornwall gets only a stub-ended electrification and almost no capacity or speed enhancements, which is a story in itself), there is a crux looming at the London end, as longer-distance traffic vies for capacity with intensive Crossrail suburban trains between Reading and London. Only a fool would bet against more messy capacity compromises, which is understandable since significant net gains in paths on the busiest sections of the route are simply not deliverable, despite the scale of the enhancement works.

All of which leads to fairly obvious conclusion. First, that the challenges faced during the ill-starred West Coast upgrading were not, as some HS2 critics claimed, an aberration. Stories of shifting specifications and engineers ‘not finding what they expected on the ground’ continue to swirl around the Great Western and other projects where major capacity enhancement is expected from an existing corridor. Second, with the GWML project in all its various elements now likely to reach a capital outlay comparable to WCRM, how can anyone rationally believe that replacing HS2 with a further plethora of ‘incremental’ upgrades represents fiscal prudence? With HS2 providing guaranteed capacity relief to at least four main line corridors, the implications of Network Rail being tasked with the same job are daunting. With NR’s debt now officially on the government’s books, the long-term cost of backing politically-expedient ‘patch and mend’ projects has just gone up a bit more.

With a general election looming, some observers are already stretching credulity by calling for HS2 to be halted. It is already clear that this would be rank bad policy.

Monday, 28 April 2014

Why MPs should back HS2 today

All about London? A possible departure board at Birmingham Curzon Street after both phases of HS2 are completed. Image: Birmingham City Council
Four key questions answered:

Will the project benefit the north, the south or both?

Both. Much attention has been focussed on the notion that the project might 'suck business activity from the north towards London', yet there is in reality no consensus on these effects, not least because there can be no direct comparison between the UK's economic geography and that of any other country. Taken to its logical conclusion, the notion of London 'winning out' from HS2 would imply that those cities with inferior connectivity with the capital would somehow be insulated from these negative effects. That rather contorted argument has been put firmly in context by the recent campaign to restore rail links between London and southwest England – there were few suggestions that rebuilding the railway through Dawlish might somehow drain the economy of Devon and Cornwall.

The lessons from the 17 000 km of high speed railway in use internationally show that few if any cities claim to have been damaged by being connected to the network. In some locations the high speed railway has acted as a catalyst for regeneration or reorientation of a local economy, and there is emerging evidence from the world’s largest high speed experiment, China, that smaller cities are benefitting as pressure mounts on overheating metropolises.

Do we need more rail capacity?

Unequivocally yes. Rail capacity, like air capacity, is defined by the ability of the network to handle more vehicle movements. That capacity no longer exists for rail services to be introduced between London, Blackpool, Shrewsbury and so forth, which is comparable to issues facing London Heathrow airport with its shortage of landing slots. More than £10bn has been spent on refurbishing the West Coast Main Line in the past 15 years, yet much of the capacity gains this programme anticipated have proved illusory. Particularly damaging are the cuts to local trains and station closures which have been made to accommodate more fast trains to London.

The legacy rail network has become more London-centric in the past decade as more high-yield long-distance trains have been introduced, but this has come at the expense of intermediate towns and smaller cities. HS2 is an opportunity to move a sizeable proportion of inter-city traffic to dedicated infrastructure, liberating the conventional network. However, this is not a simple or straightforward process, and reallocating the capacity released by HS2 is one of the biggest tasks facing rail network planners.

What are the viable alternatives, if any?

The main alternative is further incremental upgrading of the three main north-south rail axes. Investment in lines which don't go to London is a tougher proposition -- none of the groups opposed to HS2 have to my knowledge proposed significant spending on links between Birmingham and northern England, which is one of the most underappreciated assets of the HS2 plans. Upgrading of busy conventional railways, as the West Coast Main Line renewal proved beyond doubt, would cost many billions of pounds per corridor, for capacity gains which are at best uncertain.

Reliability of upgraded railways is also in doubt, since the fabric of the infrastructure (bridges, tunnels, embankments) cannot meaningfully be updated. The WCML, despite the near £10bn investment since 1998, is the least reliable route in the UK, as evidenced by industry punctuality figures, with the King's Cross - Edinburgh line not far behind. Both would benefit from HS2 taking some of the strain. This issue is of course highly nuanced – nobody is suggesting that enhancements to the existing railway should not happen, but rather that they are least effective where the capacity shortfall is greatest and the 19th century network is at its most fragile.

What are the economic benefits?

In short railway investment of any kind brings wider economic and social benefits -- if we as a nation did not collectively believe this, we would not provide the level of funding for the whole network that we do. Rail is a vector of economic activity, trade and tertiary industry (the impact of weekend rail disruption on the service economy has not been quantified for example -- perhaps it should be). HS2's main economic benefits are transport related: primarily capacity, but also speed and reliability. Compare the reliability of HS1 in Kent to any other part of the network and the resilience of new infrastructure is immediately apparent.

In certain locations we can expect HS2 to act as a catalyst for development of business and residential zones; more generally, we should expect inward investors to view the country beyond London as a more appealing place in which to develop their activities.

HS2 should also deliver on improving labour market connectivity and productivity. I expect this to be most apparent not on London journeys, but on routes like Birmingham - Newcastle, which would be 55 min quicker by rail under HS2 than at present, with trains potentially running every 30 min. Sir David Higgins’ recent ‘HS2 Plus’ report goes some way to striking the right balance between links to/from the capital and those between regions, within the context that London is the origin or destination of two-thirds of British rail journeys.

Moreover, MPs should ask themselves if they feel 'patch and mend' infrastructure is good enough for our largest regional cities, while London's rail network luxuriates in more than £20bn of capital investment in the 2008-18 period, excluding spending on London Underground.

By that measure, we can certainly afford HS2. There is no option to simply spend £43bn on ‘other stuff’. MPs should back infrastructure investment which is internationally-standard, proven and safe when they vote. HS2 must be built.

This post is based on answers supplied to Sanderson Weatherall for their HS2 blog post, which appears here.

Thursday, 30 January 2014

Northern rail passengers should welcome High Speed 2

Manchester Metrolink's expansion shows that high-quality rail infrastructure in northern England can be funded and delivered successfully.
When the first trams in decades rolled into the town centre of Oldham on the morning of January 27, the North West Green Party was there to meet them, with a couple of activists bedecked in rosettes handing out leaflets. ‘Cancel the wasteful High Speed 2!’ these pamphlets blared, exhorting instead increased spend on unspecified ‘local’ rail projects instead.

The irony of the Green Party traipsing to Oldham’s shiny new light rail alignment was seemingly lost on its pamphlet writers, since the £1.7bn expansion of Greater Manchester’s Metrolink light rail network is a tangible embodiment of the HS2 philosophy – a strong reliance on new-build infrastructure and rolling stock, a mix of new and reopened route alignments, and operating principles borrowed heavily from international best practice. Essentially, the objective is ‘do what works’.

Depressingly, some of the most high-profile calls for HS2 funding to be diverted towards ‘the north’ have come from London. This, of course, has much more to do with ridding affluent quarters of north London and the Home Counties of the spectre of construction work than with an altruistic desire to help passengers in Scarborough or Southport. But, as this blog has noted before, it is local services (those with the lowest yield and greatest reliance on peak-hour patronage, when more passengers are paying full fares) which suffer most when rail capacity becomes scarce.

Hence why – as Shadow Rail Minister Lillian Greenwood pointed out in a House of Commons debate on HS2 earlier this month – the ill-fated £9bn West Coast Route Modernisation programme led to the closure of a score of local stations in rural Staffordshire, and why precious slots on the Stockport – Manchester corridor were taken from Mid-Cheshire Line trains and handed to Virgin expresses.

For those of us who advocate the development of regional railways across northern England and beyond, the notion that axing HS2 would improve the outlook for local rail spending needs to be debunked. Indeed, if northern rail travellers really want better access between a rural and post-industrial hinterland and a clutch of thriving cities, they should be egging on HS2. Why? Because HS2 brings more local rail capacity ‘bundled in’ with it.

Fortunately, policymakers across northern England have worked together over several years to campaign and finally secure a package of investment in rail infrastructure around Manchester (the Northern Hub) and gain a slice of the belated national programme of electrification. This is to be fervently welcomed, and it belies the claim (again, heard most vocally in London and the Chilterns) that HS2 is an ‘all or nothing’ scheme. In any case, a glance at the committed spending for the 2014-19 Control Period immediately confirms what a daft assertion this is.

But equally, Northern Hub is a relatively modest programme involving precious little actual construction of new or expanded railway assets. With a plan to reopen the Standedge tunnel apparently obviated by plans for electrification, the majority of the building work is now concentrated on Salford and Manchester, with the Ordsall Chord and two new platforms on the far western side of Piccadilly station. As Warrington Borough Council made clear in 2012, numerous questions remain about how and where the resulting capacity gains might be used, and just how bountiful they are going to be.

Electrification, meanwhile, is a long overdue intervention that will, over a multi-year timeframe, reduce the cost of operating any half-busy railway. That’s why both the Northwest Triangle and trans-Pennine schemes have been approved, and a taskforce is examining the potential for more routes to follow. But electrification alone has only a very marginal benefit in terms of rail capacity.

In practice, it seems inevitable that most of the benefits of the Northern Hub investment will be felt on the higher-volume Liverpool – Manchester – Leeds corridor, where notable speed and frequency enhancements are already in view. Some intermediate markets stand to benefit too – notably Huddersfield, whose MP, Barry Sheerman, is a noted HS2-sceptic. As an aside, it is strange that Sheerman has not yet voiced his fears over the Northern Hub ‘sucking business activity’ from his constituency to Leeds or Manchester, since its rationale of wider economic benefits is essentially the same as that for HS2.

Less clear are the tangible benefits for local trains on the same routes, already characterised by erratic stopping patters and elderly rolling stock. There is a risk that Flixton and Mossley passengers could face the same scrabble for access rights into Manchester and Leeds as their counterparts in mid-Cheshire already have. Why? Because any serious infrastructure spending dedicated to them has to overcome the hurdle that, typically, regional trains in northern England cover less than 40% of their fixed costs, compared to around 80% for commuter routes in the southeast. This isn’t a surprise: rail does not have as central a role in peak time travel outside London (more than two-thirds of all rail journeys are to or from the capital), and the local economy tends to preclude pricing that would alleviate this investment challenge.

Cancelling HS2 would not alter this paradigm, and it is na├»ve of the Green Party to suggest that it would. Leaving aside the inevitable reality that the £28bn target cost of HS2 would barely cover further WCRM-style upgrading of the three main lines to/from London, burdening our most cost-sensitive rail services with their own infrastructure overheads would only serve to render their economics more fragile, and risk alienating their ridership as well. Is that what the Green Party and others are really suggesting?

Capacity released by HS2 to enhance as broad a palette of regional services as possible is essential to enhance rail’s share of journeys to and from smaller towns across northern England. A more attractive frequency, timetable and journey time to hubs like Manchester and Leeds, plus interchanges with more reliable HS2-compatible inter-city services at places like York and Crewe, should put local rail on a more cost-effective footing. This hypothesis is not fantasy, either: local authorities in North and West Yorkshire have developed a business case for electrifying the Harrogate Loop line in which connections to HS2 at both Leeds and York feature prominently.

Unlike local rail services, Manchester Metrolink receives no operating subsidy, and as a result it has found it easier to secure funding, from local and national sources, for its capital programme. The Green Party is right to welcome Metrolink to Oldham, yet it appears not to understand how it got there.