High Speed 2 and the flog delusion

heseltineThe UK’s High Speed 2 mega rail project continues to make headlines when aged political grandees make statements about it. Lord Heseltine, Conservative former deputy prime minister (pictured), followed in Lord Mandelson’s footsteps on Tuesday when he urged support for the new high-speed network linking London, Birmingham, Manchester and Leeds.

But it need not have been so excitedly reported (as it was by The Guardian) that he suggested that the net cost of the project could be reduced by £10 billion if a concession (a contract to operate and maintain the line, in return for collecting fees from train operators using it) was sold to the private sector.

Well, DUH. This is what was done with HS1 (built for £5.8 billion, concession sold for £2.1 , and I reported exclusively in an article for Infrastructure Journal in April 2011 that that’s exactly what the Department for Transport proposed to do with HS2 (The Financial Times caught up with me a few months later). What’s more, the idea that selling the whole of HS2 would raise that kind of money is nothing new either; in July 2011, financial advisers at PwC suggested that selling the first phase of a completed HS2 (London to Birmingham) would raise £6-7 billion. So I’m afraid there is nothing new here. There was never any question of the DfT not trying to claw back a bit of its investment by selling the rights to the line.


About René Lavanchy

You can contact me at rene dot lavanchy at googlemail dot com.
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