HS2 campaign group claims cost deception to controversial rail project

Published on: Monday, 1st July 2019

A campaign group which is fighting against the controversial HS2 project has claimed that a cost deception applies.

In a press release, Stop HS2 spokesperson Vaughan Morris said that since the release of compensation stories and commuting conditions in the North of the country were highlighted by BBC Panorama and Channel 4's Dispatches around 6 months ago, severe frequent criticism of the HS2 project had been widespread in the national press.

He claimed that a £56bn “funding envelope” publicised by the DfT and HS2 Ltd since 2015 was not the “cost estimate”.

Referring to a 20th June House of Commons Library Briefing Paper 8601, titled 'High Speed 2: the business case, costs and spending' th campaign group press release said that a cost estimate of £64.9 billions was apparently set by the DfT in 2015 and claimed that this had been kept secret.

Mr. Morris said: "So for 4 years Ministers for Transport Chris Grayling MP, Nusrat Ghani MP and HS2 Ltd have all been repeatedly promising that the HS2 project will not cost us, the taxpayer, a penny more than £56 billions, whilst at the same time in full knowledge that the DfT 2015 cost estimate for HS2 was £64.9 billions. To further clarify, when adjusting for building cost inflation to mid 2019, the cost will have increased by 8% up to £70 billions at mid 2019 prices.

Assuming an annual increase at today's 1.84% rate, the cost of HS2 at its 2033 completion would therefore grow to £90.4 billions at 2033 prices. Taking into consideration allowances for expert independent assessment by MPBC, the National Infrastructure Commission recommended connections, the new rolling stock, the power requirement costs, and added inflation forward to 2033, the TOTAL ANTICIPATED COSTS AT 2033 for HS2 would be £198.64 billions excluding land and building purchase costs."

He called on future decision makers to consider that the annual HS2 running costs are estimated to be equivalent to the total running costs of the entire existing Network Rail network, suggesting that the cost of scrapping HS2 in the December 2019 Government spending review would only cost £2.5 billions after re-selling of purchased land and buildings already acquired by HS2 Ltd. He said: "(£2.5 billions as a percentage of £198.64 billions is only 1.26%, for those considering the “sunk cost fallacy” idea)."

The detailed Stop HS2 press release said that the briefing paper's reference to the amount spent on HS2 to date: "appears to be the latest publicly available information on the amount spent on the scheme to date. The next update it likely to occur once the HS2 Ltd accounts are published. The Government have also stated that they will publish an updated business case, including estimated scheme costs, as part of the spending review and ahead of issuing a Notice to Proceed later this year.”

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