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Misrepresenting GB rail enhancements spend

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Between now and 2019, Network Rail is set to spend “an average of £27 million a day on improving infrastructure”, according to Railnews (24 October 2014).

In fact, the amount programmed for “improving infrastructure” is much lower than that claimed by Railnews. It is curious that some writers in the railway press cannot understand the difference between renewal expenditure, and enhancement expenditure.

Written by beleben

October 24, 2014 at 11:15 am

Posted in Planning, Railways

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Foreign companies would build HS2 (part two)

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Part one

Simon Kirby, Beth West, HS2 supply conference, 23 Oct 2014

Simon Kirby, Beth West, HS2 supply conference, 23 Oct 2014

Today in Manchester, HS2 Ltd is holding its 2014 ‘Northern’ supply chain conference. At the London supply chain conference a few days ago, HS2 chief executive Simon Kirby repeated the phoney claim about 90-plus-percent of Crossrail contracts going to ‘UK-based firms’.

Lords of the Blog, Crossrail contracts, August 2014

Lords of the Blog, Crossrail contracts, August 2014

HS2 contracts story, FT, 13 October 2014

HS2 contracts story, FT, 13 October 2014

Frames from the HS2 supply conference propaganda video used on 23 October 2014

Frames from the HS2 supply conference propaganda video used on 23 October 2014

Written by beleben

October 23, 2014 at 12:25 pm

Posted in High speed rail, HS2

Tagged with ,

Superhero struggles with an envelope

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David HigginsNext Monday in Leeds Civic Hall, HS2 chairman and infrastructure ‘superhero‘ David Higgins is expected to present his ‘analysis of the impact of the line north of Birmingham’.

Despite the huge übercontingency added into the budget last year, he is “struggling to keep [the project] within the spending envelope he has,” said one person briefed on the plans. (Doug Oakervee, the previous chairman, had said he was ‘not interested’ in any of the £14.4 billion contingency that the Treasury had insisted should be added.)

[HS2 chief to rule out changes in attempt to keep budget on track, Andrew Bounds, Gill Plimmer and Aliya Ram, FT, October 22, 2014 (paywall)]

Sir David will not address the budget but will remake the economic case for the line, insiders say.

[...] Several cities had wish lists for changes but their pleas have largely fallen on deaf ears.

[...] Martin Blaiklock, a consultant on infrastructure and energy project finance, said the extra capacity [supposedly provided by HS2] needed could be built more cheaply. “[HS2] is very high-risk. There may well be alternatives available. The public are not convinced as to benefit of HS2. It is a gravy train for consultants, involving banks, lawyers and government officials,” he said.

With £800 million apparently already spent, keeping HS2 on life support is likely to have increasing impacts on the road and rail networks. According to the Shadow transport secretary, a future government “might not have enough money to maintain new roads”.

[Mary Creagh MP, quoted in the Newcastle Journal, 20 Oct 2014]

There is an issue about roads, you can’t keep building them if you don’t have any budget to maintain them.

“So there is an issue about capital spending on roads and then maintenance spending on roads.”

Written by beleben

October 23, 2014 at 10:11 am

Posted in High speed rail, HS2

Tagged with

In the devolved world

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Jim O'Neill: 'State of the art infrastructure between Northern cities is probably way more important than HS2'

‘State of the art infrastructure between Northern cities is probably way more important than HS2′

On 22nd October, 2014 the RSA City Growth Commission final report, ‘Unleashing Metro Growth’, was launched. The Commission’s ‘chair’, former Goldman Sachs economist Jim O’Neill, told Sky News that while devolving powers from Westminster was long overdue, the critical issue was solving a “hopeless” infrastructure.

[CGC]

The report makes the case for, and explain how, cities can take a new role in our political economy, creating stronger, more inclusive and sustainable growth in the UK.

The final report considers evidence heard by the Commission in the form of written submissions and evidence hearings, and discussions hosted by the Commission at seminars, roundtables and other stakeholder engagement.

The report draws on interim reports which have focused on skills, infrastructure, fiscal devolution and the role of universities in driving metro growth.

Key recommendations outline a significant shift – from the centre to metros – in policy and finance, enabling metro leaders to:

• Coordinate resources across their city-region and make strategic policy and finance decisions via place-based budgeting and investment strategy.

• Make more informed and responsive decisions based on evaluation of local data and evidence.

• Develop effective ways of integrating public service reform and economic development.

• Have greater flexibility over their spending and borrowing arrangements, including:

– Multi-year finance settlements of between five and 10 years,

– Retention of a proportion of the tax proceeds of growth; and

– Freedom for the most devolved metros to set and fully retain a suite of taxes.

Furthermore, metros should be represented in national decision making, bringing forward measures to enhance connectivity and growth, including:

• A comprehensive review on how our current and future needs for digital infrastructure can be met; and,

• Accelerated connectivity between metros in the North, Midlands and other ‘super city-regions’.

Other measures include lifting the cap on Tier 2 (non-EU) migration, devolution of adult skills budgets, and additional support for universities to help fuel their local economy.

Written by beleben

October 22, 2014 at 5:38 pm

Connectivity is a fancy word for faster journeys

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Drawing on how “connectivity influences productivity and competitiveness today”, KPMG’s 2013 analysis of HS2 regional impacts (commissioned by HS2 Ltd) looked at “the potential benefits in a different way to those captured in more traditional appraisals”.

Jim Steer and Bridget Rosewell

Jim Steer (SDG) and Bridget Rosewell (Volterra)

But what exactly is meant by “connectivity“?

According to Steer Davies Gleave’s Jim Steer — speaking as a member of the first panel at the House of Lords Economic Affairs Committee HS2 session on 21 October — connectivity “is a fancy word for faster journeys”.

[House of Lords Economic Affairs Committee]

Tuesday 21 October 2014
Committee Room 1 [...]
Economic Case for HS2

Witnesses
i. Bridget Rosewell, Volterra Consultants; Lewis Atter, KPMG; and Jim Steer, Steer Davis Gleave Consultants

ii. Professor Stephen Glaister

Professor Stephen Glaister

Professor Stephen Glaister (RAC Foundation)

HS2 is a proposed railway linking the centres of three provincial cities with London (~80% of travel would involve London as origin or destination). So the connectivity benefits of HS2 — using Mr Steer’s description — translate to ‘the benefits of speeding up rail journeys between London and Birmingham, London and Manchester, and London and Leeds’. However, KPMG’s Lewis Atter described connectivity in terms of journey-time-plus-financial-cost-of-travel and suggested that HS2 “connectivity gain” would be reduced if it used a premium fare structure, implying some relation between connectivity and consumer surplus.

Mr Steer suggested that if the high speed line were operated with premium fares, there would still be cheap tickets, ‘like Eurostar’ (needless to say, Eurostar’s cheap tickets have come at the cost of a UK taxpayer loss running into hundreds of millions of pounds).

Mr Atter said that KPMG’s ‘£15 billion’ benefit was an estimate of the difference in size of the 2037 economy with and without HS2, and although the figure looked large, it would represent less than 0.5% of the economy at that date. However, as Professor Stephen Glaister said in the second part of the session, the present value of a stream of future £15 billion annual benefits would be astronomical, “if you believe it” (KPMG have been strangely unwilling to provide a PV figure, although it is readily calculable).

Bridget Rosewell told the committee that HS2 should be routed into city centres, not parkways (Volterra was contracted to argue for a city centre station in Sheffield, but was also contracted to argue for a parkway station in the East Midlands, instead of central Derby).

Disruptive technologies could have large and unforeseeable effects on the service economies in the HS2 station cities, before the new line was even completed. Prof Glaister pointed out the sensitivity of HS2 forecasts to future events, and even to the discount rate applied to the calculation. He was sceptical of HS2’s capacity case, including the scope for classic released capacity, and seemed to be airing the idea of buying off special interests (presumably councils in the North) as an economically superior alternative to building HS2.

Written by beleben

October 22, 2014 at 12:23 pm

Who shot JR?

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Keeble Brown: 'Well done JR East'

The twitter feed of “stakeholder and media relations agency” Keeble Brown has shown considerable interest in the HS2 project of late. Why might that be?

ben-ruse-linkedin-extract-at-22oct2014

JR East twitter feed

On 31 January 2014, East Japan Railway (JR East) signed a contract to provide consultancy to HS2 Ltd.

Written by beleben

October 22, 2014 at 9:35 am

Not inventing anything

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In an interview published on 12 April 2013, HS2’s engineering chief Professor Andrew McNaughton told E&T Magazine that “we are not inventing high-speed rail. The rest of the world has invented it and uses it in different ways.” In other words, the HS2 system would use off-the-shelf construction processes, track, and sub-systems.

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The indications are that HS2 is trying to re-invent high speed rail. For example, the University of Huddersfield’s new Centre for Innovation in Rail (CIR) has announced its research and enterprise team, led by Dr Paul Allen and Dr Adam Bevan, “will embark on an exciting [HS2] project to model the vehicle-track interaction of a number of high-speed vehicle concepts, which will run at speeds of up to 360 km/h”.

'The University of Huddersfield’s new Centre for Innovation in Rail will embark on an exciting project to model the vehicle-track interaction of a number of high-speed vehicle concepts, which will run at speeds of up to 360 km/h'

Who’s in charge of stopping HS2 project drift and mission creep? Apparently, some people the transport secretary may have bumped into on the rubber chicken circuit.

Written by beleben

October 21, 2014 at 11:25 am

Posted in High speed rail, HS2

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