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die belebende Bedenkung

The cost of HS2 travel

with 4 comments

The cost to passengers and non-users of British high speed rail has been a recurring topic on the Beleben blog. But “It is remarkable that in the debate on HS2 so little has been said about fares”, claimed Patrick Collinson (The Guardian, 2 Nov 2013).

Take the prices for travelling on our only existing high-speed track, HS1, that whizzes through the Kent countryside. If you live in Ashford, the opening of the line promised a huge improvement in train times into the capital. Sure enough, it now takes just 35 minutes into London St Pancras compared to the 61 minutes it takes on the former route into London Victoria.

But at what cost? A season ticket for commuters from Ashford to a London terminal using the old route, plus an onward journey on the tube, costs £4,996 a year. That’s a pretty staggering sum for a 54-mile journey (about the same as London to Brighton). But if you want to take the HS1 trains, and save half an hour, the cost rises to £6,360. A commuter paying 40% tax has to earn £10,600 a year just to pay to get into work (oh, and there’s a £700 to £900 a year bill to park at the station).

The Ashford example suggests that using HS1 costs 27% more than the fare structure of the existing railway, which I think we can rely on as a better indicator of what fares will be like on HS2 than what the politicians are telling us. The – so far – lacklustre economic gains that HS1 has brought to north Kent should also deflate some of the more ambitious claims about the impact of HS2 on northern cities.

[…]
What the Ashford example also highlights is how the price of season tickets in the UK remains a national disgrace. The last in-depth study that compared train prices across Europe was in 2009, but Passenger Focus, which commissioned the research, tells me the pattern of prices remains the same.

Mr Collinson mentioned the ‘pretty staggering sum’ asked of passengers for a 54-mile ride on Southeastern to Ashford, and the higher cost of Southeastern HighSpeed. But there’s another cost, shouldered by non-users — the direct and indirect subsidies paid to the Southeastern train operating company and HS1 Ltd. In 2012 – 2013 Southeastern received a subsidy assessed as being 13 pence per passenger mile, more than double that of Virgin Trains. So for an Ashford commuter, the current subsidy is worth around £70 a week, largely paid for by lower rate taxpayers.

In 2010 a thirty-year sale of the lease of HS1 raised £2.1 billion “for the taxpayer”. That was well under half what the line cost to build. But much of the value of the HS1 “returned to the taxpayer” through the sale was derived from the future value of *taxpayer payments to HS1 Ltd* (in the form of track access charges paid by subsidy-hungry Southeastern).

The rationale for providing season ticket holders with discounts for travelling at the busiest time of day is somewhat dubious. Is it a quantity discount, or for being a regular customer? In that case, presumably, people who buy lots of bread, or fill up with petrol regularly, at their local supermarket should get a discount too.

There’s no getting away from the fact that compared with the classic network, each passenger-kilometre of HS2 travel would cost considerably more to provide. The maintenance costs of very high speed track are higher, as are the traction energy costs. At 400 km/h, a train uses more than 3 times as much energy as at 200 km/h.

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Written by beleben

November 2, 2013 at 9:03 pm

Posted in Uncategorized

4 Responses

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  1. The point of season tickets is to bring down the cost of fares for commuters from the otherwise inflated peak time fares that are designed to stop leisure travellers from travelling at peak times. The supermarket analogy would only work if it were time sensitive, for example if there was a discount for shopping at quiet times, and if there was such thing as leisure shopping.

    Jonathan

    November 4, 2013 at 11:01 am

    • It’s not obvious why fares policy should be designed to “stop leisure travellers from travelling at peak times”, but not other people. The cost of providing a leisure traveller or a commuter with a train seat during peak hours, is the same. A peak hour journey is a ‘good’, with an economic cost, like other goods. There’s nothing wrong with the analogy.

      beleben

      November 4, 2013 at 11:30 am

  2. It may also be worth reviewing the comments made by the National Audit Office in 2012 into the completion and sale of High Speed 1:
    “The cost to the taxpayer is higher than originally expected because the Department is now responsible for servicing and repaying the project debt. We estimate that net taxpayer support may reach £10,200 million (present value to 2070, in 2010 prices)”.
    So the total cost will be significantly more than the original cost of construction.

    Andrew Bodman

    November 4, 2013 at 5:05 pm

  3. […] per week from Ashford). If the passenger-kilometre subvention for HS2 was at the same level as for HS1, each person commuting from Leeds or Manchester would be receiving an ‘encouragement’ […]


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