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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

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

Complete and atter nonsense

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In 2008, local authorities in Greater Manchester attempted to scaremonger citizens into voting for a road congestion charge (C-charge). Without it, congestion ‘could not be tackled’ and there would be ‘no money’ for improving public transport, such as expanding the tram system.

Manchester council leader Sir Richard Leese was one of the main advocates of the C-charge, and its architect was Lewis Atter, now better known for his involvement in the derided HS2 ‘Regional Economic Impacts’ report.

[‘Manchester congestion charge: myth and reality’, By Lewis Atter, BBC News website, 30 June 2008]

[…] We calculated that effective public transport would create more than 200,000 jobs in Manchester by 2021, whereas failing to relieve congestion would reduce this number by 30,000 because some workers – and eventually jobs – would go somewhere else.

We therefore concluded that in order to realise Manchester’s growth potential the city’s transport infrastructure would need to be modernised.

As part of this process the city would need to significantly reduce congestion. Manchester would need a modern tram system, faster commuter trains and above all fewer cars.

In short, the city would need massive investments into its transport system.

The next question was how to finance such a large infrastructure project.

It was obvious that the UK government would not have all the money to pay for such a large scale project.

However, in 2004 it had created the Transport Innovation Fund.

The fund promises support to innovative transport ideas designed to relieve congestion in urban areas. And it requires a commitment to reduce congestion.

So we came up with the following plan. Manchester would apply for a big chunk of money out of the government’s Transport Innovation Fund and would ask to borrow the rest of the capital against its future congestion charging revenues.

The Yes campaign’s Dan Hodges said, “This is not a referendum on `Do you want a congestion charge?’. It is a referendum on `Do you want better buses, better trains and a Metrolink that goes where you want?’.”

On 12 December 2008, an overwhelming majority in all ten Greater Manchester boroughs voted against Mr Atter’s scheme (people based in Cheshire and Lancashire weren’t even asked). However, the scaremongering from the ‘Yes’ campaign continued, even after the result had become clear.

[‘Voters reject congestion charge’, BBC News, 12 December 2008]

Lis Phelan, ‘chair’ of the Yes Campaign, told the BBC Greater Manchester was now not “going to get the transport improvements that the region really needs”.

Mancunians saw through the threats, and lo and behold, citywide public transport improvements are now well underway (e.g. big bang Metrolink and the ‘Northern Hub’). Similar misrepresentation and alarmism are at the heart of this year’s HS2 advocacy. Once again, Sir Richard Leese and Lewis Atter are involved, and once again, the public haven’t been fooled.

Even in the (effectively zero-probability) event of ’14 years of disruption at weekends’, upgrading existing trackage was the preferred option for 40% of the public, compared to only 27% who wanted HS2 to be built as planned, YouGov reported on 30 October 2013. (A further 19% expressed the opinion that there was no need to uplift capacity on existing lines, or build HS2.)

Written by beleben

December 15, 2013 at 11:35 am