Building HS2 to Euston and Crewe could pay for itself, analysis finds

[Wolfie]

Depending on where the north end of the HS2 station ends up, something about 480-500m.

Wouldn't the subway connect at the bottom of the lifts, not on the surface?

So you are suggesting that the subway be "paid side"? Ok that makes somewhat more sense - though its still a fair walk - as long as large numbers don't use it looking to exit at Mornington Crescent.

 

[HSTEd]

So you are suggesting that the subway be "paid side"? Ok that makes somewhat more sense - though its still a fair walk - as long as large numbers don't use it looking to exit at Mornington Crescent.

That would be my conception yes.
Depending on how far north the Euston station complex ends up reaching, I'm not sure walking a few hundred metres to take a lift would be particularly attractive to Euston passengers!

 

[SynthD]

The idea that protected sightlines are so important that the government must spend literal tens of billions of pounds maintaining them is absurd.

What money is being spent? At best you could say that there is the lost opportunity of taller than 10 stories on one side of the station. It’s a big enough site to make that a small loss.

 

[Jim the Jim]

The fact that the current Euston station was largely built according to a "big concrete box" type philosophy is probably the second biggest public complaint about it, after the scrum.

 

[Palmerston]

I'm talking about the unilateral cancelling by Rishi without any checks and balances.

Without defending the cancellation, at least people knew the plan had changed. As far as I can tell, no Westminster politician really wants to define, let alone build "Northern Powerhouse Rail". Instead they just keep saying 'we'll make a study and get back to you'.

 

[Dr Hoo]

The opening post of this thread suggested that ‘completion to Crewe’ would ‘save £3.7 billion in the long run’.

Given that the ‘budget’ cost of Euston started at £2.6 billion, then moved to an ‘original’ cost of £4.4 billion, the Financial Times article mentioned £7.5 billion before someone clarified that ‘at current prices’ it is now ‘nearly £10 billion’ it seems to me that any likely ‘long run savings’ have been more than totally wiped out. The project must surely be a ‘busted flush’/‘dead loss’ in financial terms.

Am I missing something, at least within the scope of this thread?

 

[Richardr]

Pragmatic and sensible... Out of curiosity how far is "the north end" to Mornington Crescent? I'm really not sure about that suggestion not least because the only access there is two very much less than reliable lifts. I believe that it's a listed building too which has limited previous changes.

Oh talking of political costs don't forget who the local MP is. His personal share of the vote at the last election plummeted because of his stance on the Middle East. The last thing he'll want to do is pee off his own constituents further.

He got 18,884 votes. The next highest was an independent on 7,312. The chances of losing are nil.

 

[Wolfie]

He got 18,884 votes. The next highest was an independent on 7,312. The chances of losing are nil.

I didn't say that he'd necessarily lose but he will still want to restore his vote. Incidentally l live two seats away where an Independent won....

 

[FMerrymon]

The opening post of this thread suggested that ‘completion to Crewe’ would ‘save £3.7 billion in the long run’.

Given that the ‘budget’ cost of Euston started at £2.6 billion, then moved to an ‘original’ cost of £4.4 billion, the Financial Times article mentioned £7.5 billion before someone clarified that ‘at current prices’ it is now ‘nearly £10 billion’ it seems to me that any likely ‘long run savings’ have been more than totally wiped out. The project must surely be a ‘busted flush’/‘dead loss’ in financial terms.

Am I missing something, at least within the scope of this thread?

To add a little context on the FT article, their reported cost is not just the hs2 station, which was already known could be up to 4.8bn, but also 1.2bn for the tunnels from OOC, known since 2022, and 1.55bn for the redevelopment of the current Euston station.

Both the 4.8bn figure and the 1.55bn figure are clearly shown in the March 2023 NAO report, https://www.nao.org.uk/reports/high-speed-two-euston/, and the 1.2bn for the tunnels was reported when contracts were awarded in June 2022. The 1.55bn wouldn't be part of the HS2 budget either.

All seems a bit strange they reference a "leaked" confidential document and report it now as a rise in cost. Suspect a few people don't want Euston HS2 built.

 

[InTheEastMids]

To add a little context on the FT article, their reported cost is not just the hs2 station, which was already known could be up to 4.8bn, but also 1.2bn for the tunnels from OOC, known since 2022, and 1.55bn for the redevelopment of the current Euston station.

Both the 4.8bn figure and the 1.55bn figure are clearly shown in the March 2023 NAO report, https://www.nao.org.uk/reports/high-speed-two-euston/, and the 1.2bn for the tunnels was reported when contracts were awarded in June 2022. The 1.55bn wouldn't be part of the HS2 budget either.

All seems a bit strange they reference a "leaked" confidential document and report it now as a rise in cost. Suspect a few people don't want Euston HS2 built.

It's so easy to be confronted by a huge number and the red mist to descend. I did a bit of checking to find out what some similar projects had cost.

St Pancras Int - £800m (2007) - estimate £1.5Bn now (very close to the estimate for Euston)
KingsX St Pancras Tube - £800m (2010) - est. £1.3Bn now
Kings Cross Station - £550m (2012) - est £850m now
LHR Terminal 5 - £4Bn (2008), est £7Bn today

Note ONS says construction inflation data I'm working with only goes back to 2014.

Without delving into the detail, I think a significant redevelopment of Euston, including the two tube stations, would be in the same complexity/scale as the 3 above railway projects combined. So we've got to £3.5Bn and haven't even started to sort out the binfire that's been created next door - i.e. a completely new build, large, complex terminal - the comparison with LHR T5 does not feel completely mad.
Plus £1.2Bn of tunneling, which has also been bundled in.

However, what we Brits seem pathologically incapable of thinking about is the benefits part of Benefit:Cost ratio.

 

[Dr Hoo]

Without anyone spelling out what the benefits are (in financial terms for comparison with the massive costs) it’s rather hard to form a view.

What are they (officially)?

 

[Geogregor]

Without anyone spelling out what the benefits are (in financial terms for comparison with the massive costs) it’s rather hard to form a view.

What are they (officially)?

How about vastly improved connectivity between centre of the capital and the north of the country? Plus redevelopment of one of the worst parts of central London? Which will bring long term social and economical benefits.

The problem is that those benefits will come over the decades and are difficult to firmly quantify.

And it is one of the main problems of the British state and its reluctance towards infrastructure spending. The bean counters can clearly see and calculate the immediate costs but can't look forward more than a few years when thinking about benefits.

This station will last decades, probably over century. It will pay for itself many times over.

 

[Peter Sarf]

How about vastly improved connectivity between centre of the capital and the north of the country? Plus redevelopment of one of the shi*ttiest parts of central London? Which will bring long term social and economical benefits.

The problem is that those benefits will come over the decades and are difficult to firmly quantify.

And it is one of the main problems of the British state and its reluctance towards infrastructure spending. The bean counters can clearly see and calculate the immediate costs but can't look forward more than a few years when thinking about benefits.

This station will last decades, probably over century. It will pay for itself many times over.

I have total belief that we need a new high speed line to make more Northern Cities closer to London. Plus we need to reive the stretched West Coast Mainline.

But we have to get a grip on costs. OR is it the case that the people estimating do an underestimate because they know the powers that be will ignore a correctly costed project ?. When I worked as a programmer I did fairly cautious estimates but I was increasingly put under pressure to reduce the estimate to a remarkably lower level. That is when I know it was time to find a new employer that was not strangling itself with caution.

And I agree we in the UK seem to be less inclined to look at long term benefits. Some places ended up doing estimates and never actioning anything. Are we tying ourselves up in the UK.

 

[FMerrymon]

I have total belief that we need a new high speed line to make more Northern Cities closer to London. Plus we need to reive the stretched West Coast Mainline.

But we have to get a grip on costs. OR is it the case that the people estimating do an underestimate because they know the powers that be will ignore a correctly costed project ?. When I worked as a programmer I did fairly cautious estimates but I was increasingly put under pressure to reduce the estimate to a remarkably lower level. That is when I know it was time to find a new employer that was not strangling itself with caution.

And I agree we in the UK seem to be less inclined to look at long term benefits. Some places ended up doing estimates and never actioning anything. Are we tying ourselves up in the UK.

We need to get a grip on costs of construction in general, but in this instance, the government is to blame for changing the scope.

It was originally intended to be built in two phases, but Oakervee recommended one phase, considering it cheaper and to reduce disruption for local residents (that went well). The budget for the entire station then went on to phase1's budget and the cost of design and planning the 2 stage station was written off.
The underground station works were intended to be mostly done under crossrail 2, but then had to shift to the HS2 budget. Roughly an additional billion. The government insisted on oversite development, adding large piling costs on to hs2, but wouldn't allow the benefits of OSD to be transfered to the BCR. That's how the cost increased.

Redevelopment of the existing station wouldn't have been on Hs2's budget, but now they are looking at a combined build, it may put it on that budget.

Cannot avoid construction inflation.

 

[Peter Sarf]

We need to get a grip on costs of construction in general, but in this instance, the government is to blame for changing the scope.

It was originally intended to be built in two phases, but Oakervee recommended one phase, considering it cheaper and to reduce disruption for local residents (that went well). The budget for the entire station then went on to phase1's budget and the cost of design and planning the 2 stage station was written off.
The underground station works were intended to be mostly done under crossrail 2, but then had to shift to the HS2 budget. Roughly an additional billion. The government insisted on oversite development, adding large piling costs on to hs2, but wouldn't allow the benefits of OSD to be transfered to the BCR. That's how the cost increased.

Redevelopment of the existing station wouldn't have been on Hs2's budget, but now they are looking at a combined build, it may put it on that budget.

Cannot avoid construction inflation.

There is a bit of pushing the problem along going on there. Letting HS2 take over cost of underground works from Crossrail 2 is a new twist on me !. But I agree the cost of rebuilding/tweaking the existing Euston station should not be part of HS2 budget.

As for over-site development, I wonder if there is a conspiracy ?. - Make the piling and raft suitable for over-site development on top of the HS2 Euston station. Make all the costs part of the HS2 budget. Flog the limited rights to a developer mate of yours and then hey presto relax the rules !. Really would not surprise me. I come from Croydon and it appears this type of thing is not restricted to one particular party.

 

[HSTEd]

There is little reason to believe that the original cost estimates for Euston were any more accurate than HS2s other cost estimates of the same vintage.

It is often convenient to blame political meddling for cost growth, but I think it rather more likely that the original cost estimates were simply unachievable.

I also think this desperate attempt to force a Euston rebuild budget onto someone other than HS2 is rather disingenuous.
Euston might not be great, but it is clearly functional as it is, and a classic only rebuild focussed on keeping the station operational would cost way less than what is proposed in combination with HS2.

Beyond that, I don't think viewing the HS2 station as a separate station to the vestigial classic side is a sensible plan to start with.
That's the sort of thinking that leads us to bodged jobs and the sorts of dysfunction that would ruin the station as an interchange moving forward.

 

[Nottingham59]

It is often convenient to blame political meddling for cost growth, but I think it rather more likely that the original cost estimates were simply unachievable.

I suspect both apply. If the original cost estimates had been realistic, the benefit-cost ratio would have been assessed even worse than it was, and the project would almost certainly never got the go-ahead.

But I'm sure that political meddling has driven costs way above what they could have been. Just look at how much of the route is now in cuttings and underpasses (such as the A38 in Lichfield) rather than the much cheaper original plan for a simple viaduct over the top.

 

[HSTEd]

But I'm sure that political meddling has driven costs way above what they could have been. Just look at how much of the route is now in cuttings and underpasses (such as the A38 in Lichfield) rather than the much cheaper original plan for a simple viaduct over the top.

Well yes, but the original route was likely never deliverable.

Sure, if HS2 had total and unquestionable power to do whatever it wanted, that route might have been plausible, but it is pretty clear that HS2 selected an unachievable route (and they should have known this when they did it).
Ultimately, they are now complaining about mitigations they are forced into based on their own decisions. The HS1 design team knew better than to select a route like this, so why did HS2 believe it could get away with it?

 

[mike57]

I think the biggest disaster with HS2 is not just that it is now a shadow of the original plan, which was to my mind a good one, but that it has effectivley derailed(!!) any other major rail infrastructure projects in the UK. Northern Powerhouse Rail is now killed off, whatever local politicians try and spin otherwise. Nobody in Westminster is going to promote it or take any steps beyond lip service. Other large scale projects as well, e.g. reopenings of closed lines beyond those started, dead in my opinion. Large scale electrification, dead... HS2 has burnt though all the money, and left such a bad taste that no politician is going to promote rail projects for a good few years.

 

[Grimsby town]

There's a lot of drama with HS2 costs that seem to suggest that HS2 is some how both ridiculously expensive by UK standards and massively increasing in cost more than other schemes. I don't think either is true.

Costs need to come down on all UK transport infrastructure costs, HS2 is hardly unique in its cost. Crossrail's central section cost well over £1 billion per mile. The Northern line extension was £500 million per mile. The Stockport Metrolink extension is being talked about as £1 billion project making it over £300 million per mile, although I imagine that will include new trams too. Its not just rail based transport either, the Lower Thames Crossing is approaching £1 billion a mile. Comments that HS2 has ruined rails reputation to deliver projects cheaply is rubbish. We've not delivered cheap projects in the UK for years. Essentially we either accept high costs of infrastructure or we don't build infrastructure. I don't see the latter being an acceptable option.

I don't think HS2 is increasing in cost at vastly higher rate than other infrastructure projects either. What a lot of newspapers, politicians etc. ignore is that HS2s cost were always going to rise from the initial estimate because of inflation, particularly given the long time periods involved. Yet everybody seems to act surprised when this happens. Yes costs are rising quicker than general inflation but construction inflation is very high. We need to have a less sensationalist conversation about HS2 and not constantly frame cost increases as some sort of flaw of HS2 (although clearly there has been issues).

 

[HSTEd]

Essentially we either accept high costs of infrastructure or we don't build infrastructure. I don't see the latter being an acceptable option.

I don't see the former as acceptable either.
With the outturn costs, HS2's business case is basically worthless, it was not worh the money it has cost.

Indeed, the government's own oversight people concluded that completing phase 1 only had a BCR of 1.1-1.5, even including all the costs associated with cancellation.
Noone would approve this project on this basis.

If infrastructure is really going to be as expensive as it appears, it is likely to also change the type of projects that are approved.
The "growth focused" HS2 project we got would never pass muster in that environment.

The railway's finances are in pretty bad condition as it is, the burning up of political capital on HS2 is likely to cause more problems in the long run than even the cost overruns.

 

[Nottingham59]

Costs need to come down on all UK transport infrastructure costs, HS2 is hardly unique in its cost. Crossrail's central section cost well over £1 billion per mile. The Northern line extension was £500 million per mile. The Stockport Metrolink extension is being talked about as £1 billion project making it over £300 million per mile

HS2 is unique in its cost. Crossrail central section is in a tunnel under London, as is the Northern Line extension.

Most of HS2 is being built across open country and it is still going to cost £250 million per mile.

EDIT:
I looked again at the latest cost information for phase 1.

From the most recent six-monthly report to Pariliament:

HS2 6-monthly report to Parliament: November 2023 

Review of HS2 including programme update, benefits, local community impact and engagement, land and property, programme governance and a forward look.   

www.gov.uk

"In my last report, I highlighted the cost pressures faced by HS2 and the work HS2 Ltd was undertaking to review the Phase 1 estimate at completion (EAC). The HS2 Ltd Board has now advised me that its updated EAC for Phase 1 is £49 billion to £57 billion (2019 prices), the scope of which was the route from Euston to Birmingham and works north to Fradley and the Handsacre Junction."

From HS2 website:

What is HS2

HS2 is Britain's new high-speed railway being built between London and the West Midlands. It will mean more trains and faster journeys.

www.hs2.org.uk

"Comprising 140-miles of track, four new stations, two depots, 32 miles of tunnel and 179 bridges,"

So the cost of HS2 phase 1 is between £350 million and £407 million per mile of track, at 2019 prices. God knows what the outturn cost will be after the construction inflation over the five years since 2019.

 

[FMerrymon]

HS2 is unique in its cost. Crossrail central section is in a tunnel under London, as is the Northern Line extension.

Most of HS2 is being built across open country and it is still going to cost £250 million per mile.

Well if you're comparing a cost in 2024 prices to historical values then yes it will sound unique.

I agree with Grimsby Town. EWR Bedford-Cambridge is £6bn, and we don't know if that's the budget, for 36miles in 2021 prices. In 2024 prices around £190 million per mile. That's 100mph, no electrification, no slab. TRU is 11.5bn, I think again 2021 prices, for 70 miles of upgrade.

Hs2 Phase 2a was to be 5.2-7.2bn in 2019 prices and supposedly not cost plus contracts.

== Doublepost prevention - post automatically merged: 12 Dec 2024 ==

I don't see the former as acceptable either.
With the outturn costs, HS2's business case is basically worthless, it was not worh the money it has cost.

Indeed, the government's own oversight people concluded that completing phase 1 only had a BCR of 1.1-1.5, even including all the costs associated with cancellation.
Noone would approve this project on this basis.

If infrastructure is really going to be as expensive as it appears, it is likely to also change the type of projects that are approved.
The "growth focused" HS2 project we got would never pass muster in that environment.

The railway's finances are in pretty bad condition as it is, the burning up of political capital on HS2 is likely to cause more problems in the long run than even the cost overruns.

Phase 1 was not considered good value alone. Oakervee recommendation was to build both phases or not at all. Phase2a was brought forward from phase 2, because phase 1 wouldn't really work well without it and it'd allow the released capacity to be used, part of the principle reason it's being built.

However, the BCR is not the whole story in terms of business cases, the strategic value is the more important bit and it's up to ministers whether they go ahead. BCR was partly designed to weigh up the value of different options or alternatives and the way its calculated is more designed around road schemes. There's much missing from the BCR calculation for rail projects and from Hs2's BCR in particular. EWR Bedford Cambridge BCR is 0.4 I think (or so say those opposed to it).

The Network North paper had a chart of falling BCR of HS2, however, apart from the first budget increase of 2019/20, all the falls in bcr were the chopping off of bits by the government and they still excluded the still in scope at the time remaining part of HS2 phase 2b east.

As for expense, I'm not disagreeing we need to get the costs of these types of projects down, but cancelling them half way through is not the answer (workforce trained up, equipment purchased, lessons learnt - against increased prices from contractors for added risk)

 

[Grimsby town]

I don't see the former as acceptable either.
With the outturn costs, HS2's business case is basically worthless, it was not worh the money it has cost.

Indeed, the government's own oversight people concluded that completing phase 1 only had a BCR of 1.1-1.5, even including all the costs associated with cancellation.
Noone would approve this project on this basis.

If infrastructure is really going to be as expensive as it appears, it is likely to also change the type of projects that are approved.
The "growth focused" HS2 project we got would never pass muster in that environment.

The railway's finances are in pretty bad condition as it is, the burning up of political capital on HS2 is likely to cause more problems in the long run than even the cost overruns.

But of course the benefits are increasing at the same time as cost increase because of factors such as wages rising meaning the time savings are greater. The WCML is also becoming increasingly full with new open access services meaning increasingly unreliable.

If you listen to the experts on BCRs they'll say that BCRs aren't really made for large projects like HS2 and that they should be used to compare solutions rather than being used to say whether or not to go ahead with something. If we do everything off BCRs we'd not build much and build everything in London. The country needs more rail capacity to meet its strategic goals on climate change the economy. The question is how to achieve that not whether we should do it.

Take Stockport's new bus station. The BCR struggled to get above 1 and the bridge connecting the station would have been considered a complete white elephant. Yet its made a world of difference to the town and is encouraging a lot more development.

== Doublepost prevention - post automatically merged: 12 Dec 2024 ==

HS2 is unique in its cost. Crossrail central section is in a tunnel under London, as is the Northern Line extension.

Most of HS2 is being built across open country and it is still going to cost £250 million per mile.

Most of HS2 is being built through open country side but most of the cost is being driven by the urban construction. 2a and EWR Bedford to Cambridge are the best comparisons. There isn't a significant difference between 2a and EWR on a cost per mile basis.

 

[HSTEd]

But of course the benefits are increasing at the same time as cost increase because of factors such as wages rising meaning the time savings are greater. The WCML is also becoming increasingly full with new open access services meaning increasingly unreliable.

Well the reliability issue would be solved by simply not assigning paths that don't really exist to Open Access operators!
Whilst the WCML might be fuller than it has been, we are still not operating the route in a manner to maximise capacity.

Avanti still operates a peak fare policy that renders lots of highly desirable trains almost empty, etc etc. Fares and timetables on the route are still set based on an apparent attempt at revenue maximisation through a market segmentation strategy rather the one that maximises capacity maximisation. The list goes on.

HS2 also doesn't tackle many of the primary southern WCML load centres - which is why it will remain half empty (or worse!) unless a huge country spanning system of lines is developed to funnel non WCML traffic onto it.

If you listen to the experts on BCRs they'll say that BCRs aren't really made for large projects like HS2 and that they should be used to compare solutions rather than being used to say whether or not to go ahead with something. If we do everything off BCRs we'd not build much and build everything in London. The country needs more rail capacity to meet its strategic goals on climate change the economy. The question is how to achieve that not whether we should do it.

Even leaving aside that abandoning BCR would give us no qualitative framework for deciding what projects to fund..... I'm not sure HS2 is the project you would build if you were diverting resources to the railway for the purpose of meeting climate objectives.
The primary climate challenge is not the need for na ultra fast railway to compete with domestic air travel - which is largely already defeated or beyond the reach of HS2 anyway (Belfast and connecting flights etc).
The enemy is the ICE car.

And even beyond that - the cost estimates are so broken that they render any optimisation on the basis of BCR highly questionable.
HS2 designed a route (apparently) based on the flawed assumption that they would be allowed to plough through a rural AONB on the surface, then optimised based on costings that appear to have born little relation to the truth.

 

[Grimsby town]

So the cost of HS2 phase 1 is between £350 million and £407 million per mile of track, at 2019 prices. God knows what the outturn cost will be after the construction inflation over the five years since 2019.

I imagine that number already includes the impact of the very high inflation and that's why costs have gone up. 2019 prices doesn't mean that they aren't considering any cost rises since 2019. Its just a base price that has been calculated. The base year price should be kept the same to allow for comparison. Changing it constantly just creates confusion.

 

[FMerrymon]

I imagine that number already includes the impact of the very high inflation and that's why costs have gone up. 2019 prices doesn't mean that they aren't considering any cost rises since 2019. Its just a base price that has been calculated. The base year price should be kept the same to allow for comparison. Changing it constantly just creates confusion.

Exactly, the constant changing of base year is confusing the press and exaggerating the cost increases.

Cost per mile is a poor measure anyway, when phase1 contains so many expensive elements such as new inner city terminii and inner city tunnels, plus rolling stock. Those elements either aren't built or aren't included in most continental High speed line budgets.

 

[trebor79]

I imagine that number already includes the impact of the very high inflation and that's why costs have gone up. 2019 prices doesn't mean that they aren't considering any cost rises since 2019. Its just a base price that has been calculated. The base year price should be kept the same to allow for comparison. Changing it constantly just creates confusion.

You imagine wrong.
2019 prices means exactly what is says, that's the cost at 2019 prices. You have to add 5 (and counting) years of inflation to that.

 

[miami]

Most of HS2 is being built through open country side but most of the cost is being driven by the urban construction.

The nimby tunnels in the chilterns weren't exactly cheap

The Chiltern Tunnel is 16km (x2) long, same length as the main crossrail tunnel.

Crossrail's entire tunnel length is 21km (x2)

HS2s tunnel length from old oak common to Birmingham is 35km, and Euston adds another 7km to 42km, making the total length twice that of crossrail, half of the length was to placate the nimbys.

HS2 also adds about 180km of double-length track above ground. Crossrail added about 1.8km.

 

[camflyer]

How about vastly improved connectivity between centre of the capital and the north of the country? Plus redevelopment of one of the shi*ttiest parts of central London? Which will bring long term social and economical benefits.

The problem is that those benefits will come over the decades and are difficult to firmly quantify.

And it is one of the main problems of the British state and its reluctance towards infrastructure spending. The bean counters can clearly see and calculate the immediate costs but can't look forward more than a few years when thinking about benefits.

This station will last decades, probably over century. It will pay for itself many times over.

Euston is far from being the worst area of London but it could still do with some redevelopment especially as it acts as the Gateway to London for may visitors and the current station is about the worst first impression that the city could hope to give

The problem with infrastructure investment is that it doesn't guarantee economic benefits but it is hard for the economy to grow without the necessary infrastructure. It's "required but not sufficient"