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HS1 performance, part three

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Following on from the NAO report, the House of Commons Public Accounts Committee has now published its 4th Report of Session 2012-2013, ‘The completion and sale of High Speed 1’, (HS1) as HC 464.

PAC report and proceedings

Bollards to Stratford International

6 July 2012

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:

“Whilst HS1 provides an efficient service, contributing in an important way to British transport infrastructure, there were costly mistakes in the history of the project. These must not be repeated with HS2.

HS1 was supposed to pay for itself but instead the taxpayer has had to pay out £4.8 billion so far to cover the debt on the project.

The root of the problem is the inaccurate and wildly optimistic forecasts for passenger numbers both when the line was being planned and when the Department restructured its deal with the contractor, London & Continental Railways Limited. International passenger numbers have only been a third of LCR’s original forecast and two thirds of the Department’s forecast. The Department failed to take into account the growth of low cost airlines or the competitive response of the ferry companies.

This isn’t the first time that over-optimistic planning and insufficiently robust testing of planning assumptions has got the Department into trouble. My Committee’s report on the East Coast Mainline raised similar concerns.

HS1 will continue to cost the taxpayer money – £10.2 billion over the next 60 years, so before going ahead with HS2 we need a robust cost benefit analysis.

Some of the Department’s assumptions about the benefits of faster travel are simply untenable. For example, the time business travellers save by using high speed rail is valued at £54 per hour yet the time commuters save getting to and from work is only valued at £7 per hour. It is difficult to see how this can be justified. The Department also assumes that all time spent on a train is unproductive. And unrealistic assumptions about ticket prices act to exaggerate passenger demand forecasts.

The Department also told us that it had not considered the benefits and costs of alternatives to HS2 such as investment in broadband videoconferencing or investment in alternative, more local train routes.

It is nonsense that the Department does not have a full understanding of the wider economic impact and regeneration benefits of transport infrastructure, including HS1, to inform future investment decisions.

All these things are crucial for proving the case for investment in long distance travel and demonstrating value for money.

The Department must revisit its assumptions on HS2 and develop a full understanding of the benefits and costs of high speed travel compared to the alternatives.”

Margaret Hodge was speaking as the Committee published its fourth Report of this Session which, on the basis of evidence from an expert witness and the Department for Transport, examined the High Speed 1 project and the lessons that need to be learnt from it.

The high speed railway linking London to the Channel Tunnel, known as High Speed 1, has now been fully open for almost five years. Since opening, the line has had a good performance record and the Department for Transport (the Department) can be proud of some aspects of the project. A revised timetable and budget were established in 1998 and the line was constructed within this revised timeframe and revised budget. In 2010 the Department managed the sale of HS1 Limited, which has a concession to operate the line for 30 years, in an exemplary manner. The sale, along with the Department’s restructuring of Eurostar UK, which ran the British arm of the international train service, transferred most of the remaining operational risk relating to the line to the private sector, with the project debt being met by the taxpayer.

There have also been some costly mistakes in the history of this project. The Department originally expected London & Continental Railways Limited (LCR), (which was awarded the contract to build the line in 1996), to service the project debt from future revenues from Eurostar UK (the train operator). However by the end of 1997 Eurostar UK revenues were substantially below LCR’s forecasts. Consequently, in 1998, the Department agreed to restructure the deal and guarantee most of LCR’s debt. The Department’s debt guarantees were called upon in June 2009 and the taxpayer is now servicing and repaying the project debt of £4.8 billion.

Passenger demand for international services on the line has been much lower than forecast and that is the root cause of the failure of the original deal and of the call on the Department’s debt guarantees. International passenger numbers have only been one-third of LCR’s original 1995 forecast and two-thirds of the level the Department forecast in 1998. The Department’s planning assumptions for the line were wrong; it failed to properly consider the impact on passenger numbers of the growth of low cost airlines and the competitive response of ferry companies. Over-optimistic forecasting and insufficiently robust testing of planning assumptions is a recurring problem, as our previous report on the East Coast Mainline has demonstrated. The Department must learn the lessons from the past and ensure that cost benefit analysis is solid as it develops its plans for HS2.

The Department still does not have plans in place to evaluate fully the impact of High Speed 1. Total taxpayer support for the line, over a 60 year period to 2070, has an estimated present value of £10.2 billion. Benefits for passengers from shorter journey times over this period have an estimated present value of £7 billion. The basis of this cost/benefit analysis is open to challenge. There is a risk that the value of passenger benefits is overstated, for example because the Department’s methodology assumes that all time on a train is unproductive, and a further risk that the wider economic benefits are not taken into account because no appropriate analysis is made.

While difficult, it is disappointing that the Department has not attempted to understand the economic impact and local regeneration benefits achieved so far from High Speed 1. Also it has not assessed the impact on regeneration of decisions on where to locate stations. The Department will need to evaluate HS1’s regeneration benefits and wider economic impacts worth many billions of pounds if the project is to demonstrate value for money. To learn from past decisions and so make well-informed investment decisions in the future the Department, as well as other government departments investing in infrastructure, must improve its understanding and measurement of the economic and regeneration benefits of new infrastructure.

Commuter traffic into London from Kent and East Sussex is some of the heaviest in Britain, yet Southeastern’s Class 395 trains are generally poorly used, and HS1 only accounts for 5% of the company’s passengers.

HS1 commuter services were an eleventh hour add-on, when politicians realised there was not going to be enough international traffic. It’s all very well saying the ‘average delay on HS1 is seven seconds’ but when many paths aren’t used, it’s no surprise that punctuality is good.

The engineering and architectural design of HS1 left a great deal to be desired. The mediocre concrete box planned for Old Oak Common HS2 is reminiscent of Stratford International. The best architecture on HS1, at St Pancras, is from a different era, and was taken over from the Midland Main Line.

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Written by beleben

July 6, 2012 at 10:26 am

HS1 performance, part one

with 5 comments

According to Lucy James, of the Campaign for High Speed Rail,

HS1, the only current high speed line in Britain, was delivered on time and on budget.

For such a sentence just sixteen words long, there’s a remarkable amount of dissemblance packed in.

  • “the only current high speed line in Britain”

    HS1 is not “the only current high speed line” in Britain. Under the definitions used by the International Union of Railways, the East Coast, West Coast and Great Western Main Lines certainly qualify as high speed lines (and a good case could be made for the Midland Main Line). But although it looks like a high speed line, HS1’s credentials turn out to be less than convincing.

  • “on time and on budget”

    The LGV line from Paris to Frethun, on the French coast of the English Channel, was built at the same time as the Channel Tunnel. This allowed trains to use new-build track from Paris to Folkestone from start of service in 1994. But from Folkestone to London, trains had to use the existing ‘Southern Railway’ tracks.

    The British government of the 1980s had refused to fund construction of dedicated new build track, and passed legislation to make such funding unlawful. The manoeuvring required to dismantle the policy took so long that the first part of HS1 did not open until 2003, and it did not reach London until 2007.

    Even if the decade-long delay caused by wrangling and face-saving is ignored, it would still be incorrect to state that HS1 was “on time and on budget”. The National Audit Office documents on ‘The completion and sale of High Speed 1‘, published on 28 March 2012, stated that

    The line was delivered within the overall funding and timescale available for the project. However, this was at a higher cost and later than its targets. Construction of the line cost £6,163 million, 18 per cent higher than the target costs.

Written by beleben

March 28, 2012 at 11:47 am

Bad deal

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In April 2011 Rail.co reported that Kent County Council funding would allow a handful of Southeastern High Speed trains to run to and from Deal and Sandwich (services commenced in September).

The new service aims to ‘boost business confidence and support new employment opportunities in the area at the same time as Pfizer withdraws from its Sandwich site.’

At the Kent Rail Summit at County Hall, Leader of Kent County Council Paul Carter announced their support for the new peak service for rail travellers from Sandwich and Deal which will slash the journey time to London to approximately 90 minutes.

It will provide 3 trains to London in the morning leaving Sandwich at 0551, 0617 and 0647 and calling at Deal 5 minutes later. Trains will return from St Pancras at 1740 and 1840.
[…]
The cost of this new service is approximately £151,000, but costs will reduce the more that the services are used. KCC is also lobbying the Department for Transport for an exemption to the current franchise agreement which will make further savings on the cost.

KCC Leader and Chairman of the Sandwich Economic Development Task Force Paul Carter stated:

“Journey times to Sandwich and Deal will be slashed by the introduction of this new High Speed service which will provide an immediate boost to business and job prospects in the area and has long been called for by local residents.

“We’ve worked closely with Southeastern, local MPs and Dover District Council to secure the service at minimum cost. At a time of exceptional need for the area with the exit of Pfizer in 2012, we were determined to provide new high speed links which would support local businesses and attract new investment into the area. It’s great news and a real boost to Sandwich and Deal.”

If the subsidy provides trains from East Kent in the morning and trains from London in the evening, how does that “support new employment opportunities in the area“?

High speed rail services are already heavily subsidised by central government. So what is the rationale for prioritising additional council funding for HS1 over rural bus services, or nurseries? HS1 accounts for just 5% of Southeastern’s passenger numbers, and its importance to wider London and South East transport is miniscule.

Written by beleben

December 20, 2011 at 12:12 pm

Birmingham, Boris and Manston

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According to Kent Online, a nationwide ICM survey commissioned by Medway Council has found 76% of adults believe it is unnecessary to move London’s main airport off the north Kent coast.

Medway Council has run a joint campaign since 2009 with Kent County Council and the RSPB against the proposed airport, which its argues is “undeliverable, unaffordable and unnecessary”.

The authority commissioned ICM to question 1,000 adults across the UK about Boris Island.

The poll, which cost the council £460 by adding questions to a separate survey, found 81% of people think £70bn is too much to spend on a new airport.

Nearly nine out of 10 people agreed we should instead use the capacity already available at regional airports, including Birmingham and Manston, in Ramsgate.

The idea of an offshore airport in the Thames Estuary was supported by London mayor Boris Johnson, but today’s Evening Standard (5 October 2011) reported that he is no longer committed to the idea:

‘The Mayor previously said that a £40 billion airport off Sheppey to ease congestion at Heathrow would be “the most powerful single statement we could make about the ambition of this country”.

But he now concedes that there may be alternative ideas to the so-called “Boris island” and accepted that fast rail links between airports could provide a solution.’

Fast rail links between airports are a solution to a problem that doesn’t seem to exist, but faster transport links to airports might be helpful, depending on how the airport relates to its catchment.

Manston, in economically depressed East Kent, would seem to make a lot of sense for providing more South East airport capacity. Unlike Birmingham, it’s actually in the South East. And there’s a half empty, allegedly ‘high speed’, railway to London, built at enormous public expense, running close by.

Written by beleben

October 5, 2011 at 11:39 pm

Not-so-High-Speed One

with 14 comments

Eurostar‘s August 2009 Framework Track Access Agreement with the operator of High Speed One stated that

HS1 Ltd shall provide or procure the provision of sufficient infrastructure capability on HS1 for a Class 373/1 Eurostar Intercapitals Unit or a train with equivalent performance characteristics to travel in either direction between St Pancras International at a stand in the platform and the Eurotunnel Boundary without stopping in not more than 31 minutes and nil seconds under normal signalling conditions.

giving an allowed average of about 211 km/h between St Pancras and the Channel Tunnel.

There is no universal definition of what ‘high speed rail’ means, but in Europe the International Union of Railways/European Union  definitions are generally observed. For new dedicated infrastructure, the EU has stated that

1. b) High Speed lines shall comprise:

Specially built High Speed lines equipped for speeds generally equal to or greater than 250 km/h

HS1 is new dedicated infrastructure, but the tech agreement with Eurostar requires an average speed of about 210 km/hr.

So although

  • it looks like one,
  • costs like one, and
  • is named as one,

HS1 isn’t a high speed line.

The track access agreement with Southeastern doesn’t seem to be on the HS1 website, at the time of writing. But it’s known that Southeastern High Speed’s Hitachi rolling stock has a maximum speed of 225 km/h, with a normal maximum speed of 200 km/h on Hs1.

The UIC/EU definition for high speed rolling stock is

High Speed advanced-technology trains shall be designed in such a way as to guarantee safe, uninterrupted travel:

  • at a speed of at least 250 km/h on lines specially built for High Speed, while enabling speeds of over 300 km/h to be reached in appropriate circumstances,
  • at a speed of the order of 200 km/h on existing lines which have been or are specially upgraded,
  • at the highest possible speed on other lines.

So although it

  • looks like high speed,
  • costs like high speed,
  • and is called ‘Javelin’,

HS1’s dedicated rolling stock isn’t high speed, either.

Written by beleben

February 12, 2011 at 9:37 pm