die belebende Bedenkung

Unexpected candour

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Back in 2008, Centro’s chief executive Geoff Inskip wrote to the Birmingham Post, explaining that plans to extend the Midland Metro tramway remained a top transport priority.

The business case for the Phase One extensions through the Black Country and from Snow Hill to Five Ways is very strong, confirmed by an independent study by the CEBR which shows that the significant and lasting economic benefits that the new lines will bring to the region undoubtedly stack up.

This includes the creation of up to 5,300 jobs and a boost to the West Midlands economy of £178 million a year — as well as providing a major tool in managing congestion.

In fact, the “independent” CEBR (Centre for Economic and Business Research) study mentioned by Mr Inskip was commissioned by Centro itself — but it didn’t explain how building a few kilometres of tram line would create thousands of permanent jobs across the West Midlands.

The existing 20.2 km Midland Metro, between Birmingham and Wolverhampton, only carries 5 million passengers annually (a third of what Centro had forecast) and there has been no growth in usage since its opening in 1999. By 2011, cost increases and the recession had cut Midland Metro expansion down to a few hundred yards in Birmingham city centre.

When bus re-routeing is included, the curtailed Stephenson Street tram extension is costed at £143 million, and Centro’s priorities have shifted to ‘Birmingham Sprint’ bus rapid transit, and long distance high speed rail. It turns out that CEBR has an opinion on HS2, and it’s unexpectedly candid — and ‘off-message’.

You can imagine that a programme that involves spending £36 billion will find a large number of vested interests supporting it. And indeed supporters of high speed rail have been vociferous in their support for the proposed HS2 high speed rail link. But looking at the economics issues dispassionately, the sums don’t add up. CEBR has checked the demand forecasts, the economic case and the financial sums carefully.
Our analysis is that the benefit cost ratio is only 0.5 rather than the official and implausible 2.0. The financial deficit which will require a government subsidy is likely to be £18 billion rather than the official claim of £14 billion. This seems a major waste of money when spending is being cut and taxes raised.
If the project goes ahead it will be a triumph for spin and vested Interests over economic good sense.

Written by beleben

February 24, 2012 at 1:18 pm

One Response

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  1. […] Centro’s claims are contested by numerous individuals and organisations, including CEBR (which worked on economic forecasting for Centro, on its Midland Metro […]

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