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A wee bit more spin

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The Oct 2013 HS2 Y network benefit cost ratio (2.3) is unimpressive, compared to the (non-optimised) 51m scheme

The October 2013 HS2 Y network benefit cost ratio (2.3) is unimpressive, compared to the (non-optimised) 51m scheme

As part of its high speed rail ‘fightback’, the government has today published ‘The strategic case for HS2‘, Atkins’ Appraisal of rail alternatives to HS2, and Network Rail’s Possible enhancements to the existing rail network. HS2’s Ltd website has also been updated with the October 2013 Economic Case and supporting documents.

According to transport secretary Patrick McLoughlin, “the new analysis shows that the Y network delivers a good return on investment, with a standard cost benefit ratio of 2.3”.

He stated that HS2 has been allocated a funding envelope of £42.6 billion in the 2015 Spending Review and ‘will not exceed‘ that allocation.

[…] It includes £14.4 billion of contingency, which I am determined to bear down on and I have put in place rigorous controls, including a target price for HS2.

Why Mr McLoughlin continues to exclude rolling stock costs from the HS2 project, is not clear. Whether leased or bought, the trains do have a present value cost. There is no alternate use for the trains, and existing ones cannot operate the proposed service. So, train costs should be included.

Channel 4 Fact Check examined how HS2’s BCRs compared with other rail projects.

The BCR for the first phase of HS2 (London to Birmingham) remains the same at a more modest 1.7 to 1. That’s “medium” value, in government jargon.

The government sought to put these headline figures into context today when it said in a statement: “This is similar to Crossrail and higher than the benefit cost ratio for some other major projects when approved, such as Thameslink and the Jubilee Line extension.”

But that’s putting a wee bit of spin on the facts.

The BCR for HS2 includes estimates of “wider economic benefits” that will hopefully be generated by the railway. This pushes the total benefits up and makes the BCR more optimistic.

When the costs and benefits of those other big rail projects – Crossrail, Thameslink and the Jubilee Line extension – were done, wider economic benefits were not included.
[…]
When you compare like with like, HS2 doesn’t exactly beat other big rail projects into a cocked hat when it comes to value for money.

But note that 2.3 to 1 is still at the upper end of the scale. That’s if any of this analysis bears any relation to reality – something of which we are yet to be convinced.

Another important difference between Jubilee Line extension and HS2 is the valuation of time. The latter’s benefits largely accrue from inflated coefficients used for business travel. It’s not really true to say that a BCR of 2.3 “is still at the upper end of the scale”, either. The (sub-optimal) 51m scheme’s BCR was stated as 5.2 in HS2 Ltd’s January 2012 Value for Money statement.

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Written by beleben

October 29, 2013 at 9:17 pm

Posted in High speed rail, HS2

4 Responses

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  1. At least the Atkins report proposes splitting one Glasgow/Liverpool train per hour. Not clear why this would be done at Warrington Bank Quay (where platforms would need to be extended) rather than Crewe (where at least 2 are already 400m long), nor why.Manchester/Liverpool couldn’t also be combined and split at Crewe.

    It’s also not clear how the 3 freight loops between Preston and Glasgow and the 4 tracking of the “Chat Moss Line” fit into a comparison study when HS2 is only planned to go to Manchester & Leeds.

    Richie S

    October 30, 2013 at 10:46 am

  2. I’m not sure why we continue to refer to the ‘Y’. The East Y is not on the recently agreed maps for the EC’s TEN-T Corridor 8. See Press release plus map IP/13/948 (not sure if this comment box takes hyper links) . So the line Birmingham to Leeds will be graded as part of the Comprehensive network, but London to Manchester will be run as an EC Core Corridor (Cork to Marseilles). So does that put a big question mark over the Government’s commitment to ‘jobs for the North? Yorkshire is not on the map chaps!

    Offa

    October 30, 2013 at 6:55 pm

  3. Rolling stock is paid for by the operator of whoever runs the services – the same argument is applied to every other comparable railway project; HS1 didn’t include the cost of Eurostar’s trainsets, those used by Southeastern or those on order for Deutsche Bahn or any that future operators may use either. The West Coast Route Modernisation didn’t include the cost of the Pendolino’s, nor does the Border’s Railway include the cost of the EMU’s displacing the trains that line will need. Even the various electrification project’s underway don’t include the cost of the new ‘IEP’ trains just ordered.

    Like it or not this there is no reason for HS2 to be treated differently.

    Chris

    October 30, 2013 at 7:24 pm

  4. I am sure that, for most people, life’s too short to spend much time analysing:
    https://www.gov.uk/government/publications/rail-alternatives-to-hs2
    or
    Appraisal of rail alternatives to HS2
    I have looked more closely at:

    Appendix A: possible enhancements to the existing rail network
    Page 25 says:
    • Overview of WCML Service Package A:
    • Intercity:
    • A total of 12 long distance services from London Euston are provided per hour all of which are assumed to be 11 carriages compared to a mixture of 9 and 11 carriages in the ‘do minimum’. During the peak period all long distance train services will call at Milton Keynes. This compares to 10 in the ‘do minimum’ off-peak. The indicative long distance services assumed are as follows:
    • • 1 tph London – Preston – Glasgow
    • • 1 tph London – Liverpool via Runcorn
    • • 1 tph London – Glasgow & Liverpool via Chat Moss (train divides at Warrington)
    • • 4 tph London – Manchester
    • • 2 tph London – Birmingham New St
    • • 1 tph London – Wolverhampton via Birmingham New St
    • • 1 tph London – Shrewsbury via Birmingham New St and Wolverhampton
    • • 1 tph London – Chester – North Wales
    • • 1 tph London – Northampton – Crewe (serving Trent Valley stations)

    • The above shows in theory 13 trains, but in practice there are only 12 trains leaving Euston as one splits at Warrington to enable 2 tph to both Glasgow and Liverpool

    I know I am capable of missing the blindingly obvious but, is it not the case, that, if 13 trains run, and one of these splits into two, you actually get 14 and not 12 tph equivalent? Otherwise the London – Glasgow & Liverpool via Chat Moss would not run at all.
    Do you really need a full complement of carriages throughout the day? You certainly want the maximum at (most – “we can work it out”) peak times but 11 carriages in off peak looks OTT. We need bums on seats not empty seats.
    The SAIP (Stafford / Norton Bridge) planning proposal says there will be:
    • Two extra trains per hour (each direction) between London and the north west of England
    • One extra fast train per hour (each direction) between Manchester and Birmingham
    • One extra freight train per hour (each direction) through Stafford
    I am sure there were time improvements promised in earlier docs which has/have disappeared and Appendix A now indicates virtually no time benefit from this work. I’m not sure they even incorporate the published extra tphs – how can anyone tell when they throw so much spurious information into the arena?

    McMichael

    November 2, 2013 at 12:23 am


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