The ballooning cost of HS2 is a reflection of our infrastructure planning problems.
Gordon Brown, in his final days as prime minister, promised to invest £20bn into a high-speed railway line that would ferry tens of thousands of commuters between the north and south of England.
Brown, in a 2009 speech, said: “This is a momentous occasion in the long and glorious heritage of British Railways.”
Nearly 14 years after the project began, the cost to build the HS2 railway link has risen to over £100bn. This is 8.5 times higher than similar projects in other parts of Europe.
Jeremy Hunt, speaking at a Tory Conference in Manchester on Monday, said: “If we’re going to solve the big problems this country faces we have to know why building high-speed rail costs 10 times as much in the UK than it does in France.” “That’s totally and utterly inacceptable.”
According to an analysis by Britain Remade the stretch of HS2 between London and Birmingham will cost PS396m a mile, making it the most expensive railway in the world. Similar projects in France cost £46m/mile.
The Infrastructure and Projects Authority has deemed the project “unachievable”. It is now expected that the northern leg will be completely scrapped.
The UK is an outlier in the world because of its infrastructure spending problems.
Crossrail’s construction was years behind schedule and billions of dollars over budget. Edinburgh’s tram system had a budget of £375m, but the cost ballooned up to £776m when it opened in 2014. The TransPennine Route upgrade was estimated to cost £289m, and be completed in 2019. The project is not complete, and it will cost an estimated £10bn.
Sam Dumitriu of Britain Remade says that even if the cost of HS2 is as budgeted for 2013, it will still be 3.7x more expensive than France’s line between Tours & Bordeaux.
In his research, he found that the cost of tram projects in Britain is 2.5 times higher than those in France per mile. Costs of building underground railways are twice as high in Italy, Germany and Spain.
Dumitriu says that Spain is an excellent example of how infrastructures can be built faster and cheaper, using standardised station designs and prioritising speed.
Madrid constructed an underground network of 81 miles over an eight-year span at a cost per mile of £68m, which is a ninth the cost of the Jubilee Line Extension. Spanish techniques include hiring six tunnelling machine to work 24/7 in order to complete the project as quickly as possible.
The Chancellor argues that the planning bureaucracy in Britain is at the core of the problem.
Hunt said that it takes an absurd amount of time to even start a project. There are many national policy frameworks you need to consult on.
Everyone wants to protect the environmental, and everyone wants to treat local residents fairly who will be affected by new infrastructure. It can take up to five years for all of these processes.
Stephen Glaister, professor at Imperial College London’s Centre for Transport Studies, explains that part of the problem stems from the fact that planning rules are more powerful in the UK than on the continent.
Glaister explains that “we have common law in this country, which means individuals have the rights to property and the state must obtain these rights through due processes to get things done.”
This is what planning requirements are about. In Europe they have Napoleonic laws, where the state has the rights, and the individuals are licensed by the state.
“If the French government or another European country wants to build a railroad, they are entitled to do so.”
It means that projects are not delayed as much by public consultations. One minister who was asked by the French government how he handled public consultations when the French government launched its major program of pressurised-water reactors responded bluntly, “We have a phrase: When you drain the swamp, do not consult the Frogs.”
Dumitriu says that “major infrastructure projects [in Britain] have to deal with a much higher bureaucracy level than ever before.”
Partly, this is due to the new environmental requirements. According to Britain Remade, the environmental impact assessment of the Sizewell C plant, currently in planning in Suffolk, lasted 44,000 pages. The environmental impact assessment for the Sizewell C nuclear plant in Suffolk, which is currently under planning, was 44,000 pages long. This is according to Britain Remade. The planning burden is increasing rapidly.
Airport terminals, runways, and renewable energy projects all face the same problems.
Hunt stated at a fringe event hosted by the Centre for Policy Studies that it can take up to seven years to construct a new offshore farm and another seven years before you are able to connect to the grid. “That’s ridiculous. We have a lot to do in order to improve the way infrastructure is built.
Dumitriu says that planning and Nimbyism is not the only problem. The cost of construction in the UK is higher. It is partly due to the higher costs of design. Our sector is also reliant heavily on subcontractors.
According to the Construction Products Association, less than one eighth of UK construction workers are permanently employed. The construction industry is therefore particularly vulnerable to fluctuations in labour costs , such as the recent record-breaking increase in wages.
The Government will be caught in a Catch-22 if they cancel HS2. The initial costs may disappear but the longer-term cost will be much higher.
Glaister says that a clear pipeline of projects is essential for the sector to plan in advance. They can maintain a steady workforce and maximize scale efficiencies.
The Treasury is worried about this. Glaister says that they talk about creating a pipeline so these projects are not just one-offs and the industry can reduce costs by moving from job to job in a systematic manner. Cancelling HS2 would destroy a large part of this pipeline.