Sir David Higgins, chairman of HS2 Ltd, is today expected to announce some cost savings for High Speed 2 , the north-south high-speed rail link the UK government proposes to build. If press reports are accurate, then these ‘savings’ carry a good deal of spin and are a sad sign of the continued unnecessary political game-playing around the project.
The Financial Times reported last week that Sir David’s cost savings would come mainly from having a large-scale redevelopment of Euston station, HS2’s London terminus. This could then be paid for entirely by property developers would would recoup their investment from renting out commercial space above and around the new station.
Alas, this idea is nothing new. This month’s Modern Railways magazine carries an article by me in which I interview Beth West, HS2’s commercial director. Magazines being what they are, the actual interview took place in February, and indeed on the same day Ms West met Sir David, who’d just joined HS2 Ltd, for the first time. So he hadn’t had much time to prepare his report. The article says:
“As with Crossrail, HS2 Ltd also intends to engage the private sector in contributing to the construction cost of stations.”
That’s a very cramped way (I was, like all journalists, struggling with the word count) of expressing that the plan has always been to get property developers to help pay for the cost of stations. That is what is happening with Crossrail, and it’s what was going to happen with Euston already. And since HS2 will have bigger stations than Crossrail, with more commercial development, the contributions will naturally be bigger. To argue that a bigger Euston HS2 station than previously planned would paradoxically cost the taxpayer less, because it would attract greater private sector investment, is not entirely implausible, but it’s misleading to suggest this idea has been plucked out of nowhere.
If I sound cynical, remember that the government has already tried to spin mythical cost savings about HS2. Last month, I blogged exclusively that they had briefed the media on a supposed £10 billion saving for HS2, which simply involved doing what they intended to do all along (sell a concession to operate the line to the private sector).
Besides, it’s not hard to see where the motivation for such spin comes from. Only yesterday, the Labour Party’s Ed Balls, who is set to be chancellor if his party wins the next election, was demanding that the cost of the HS2 project be reduced. These ‘savings’ look uncomfortably like they’re designed to ensure a cosy cross-party agreement.
More on the costs of HS2 here.