June wasn’t a good month for rail in general and HS2 in particular. An urgent priority for the latter was to get as far away as possible from Network Rail’s modernisation programme debacle. A fight back was expected and one duly arrived.
The first sign was the appointment of Lord Adonis as a non-executive director of HS2 Ltd. In the Beaufort scale of surprising news, this fell into the slight earthquake in a molehill category.
Lord Adonis was described by Sir David Higgins as “a big thinker, a good strategist”. No-one has ever suggested that HS2 lacked visionaries. In fact, there are so many that the company may need to hitch on an extra carriage to accommodate all the blue sky, or rather blue track thinkers. It’s the mundane nuts and bolts stuff that seems to be the problem.
One bit of good news, in the context of financial prudence, was that Lord Adonis will be paid just £950 a day. In HS2 terms, that equates to small change down the back of the sofa.
The other manifestation was in the form of a major interview with the Sir David himself.
In terms of rebalancing, he said: “I believe the north has been short changed. I look at expenditure per head, the pass-me-down process – the offcuts from rolling stock always end up in the north. (For comment click here ) The obvious point to make is that if the pressing need is to address the imbalance why not start in the north and why not start with HS3, rather than building a high speed line from London to Birmingham?
Sir David has been in post for 18 months. His appointment was based to a significant degree on his abilities regarding financial delivery. HS2 is costing an awful lot of money – perhaps more than £70bn by 2033. But it has been a bit of a wait for all of us to get to the revelatory punchline. In the Guardian interview he asserted: “These are assets – not a cost to the nation.” The interpretation seems to be taxpayers can rest easy in funding such a project because they are contributing to a national asset.
A further point of illumination came from the part of the interview dealing with the final plans for rebuilding London Euston expected to “be approved” this year. The interview reported we would be likely to see a huge underground superstation combining Euston and St Pancras with a Crossrail 2 station inbetween.
The problems HS2 Ltd is having with Euston have become legendary with nine failed designs and counting. Such a sweeping vision of what Euston might eventually look like, does raise one issue.
At a recent public meeting at Camden an observer was quoted as saying: “We thought it might be about speed or capacity but it’s about neither of those things. It’s about creating 17 football fields of flattened area around Euston station for international developers to come in and make a profit.”
There were reports in June that elements of the HS2 works at Leeds station and at Old Oak Common were heading off balance sheet. This may be the case for Euston – HS2 Ltd has referred to the major updating required for station irrespective of accommodating the high speed line. So Euston’s HS2 requirements may be subsumed into a superstation/Crossrail 2 megaproject. And the answer to how could this come about in terms of finance may lie in the 17 flattened football pitches.
On the budget generally Sir David made another interesting comment. He said phase two: “is much less certain in terms of design, and even the final route hasn’t been determined – but we should work to deliver phase two in £25.5bn, in 2011 pounds”. In June, 2013 when the budget for the project was raised from £32.7bn to £42.6bn, phase two was costed at £20.6bn. Clearly, there has been some internal budgetary re-allocation.