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HS2: Cost of London-to-Birmingham leg of proposed new railway a third higher
than previously estimated

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   Protesters demonstrating against the High Speed 2 (HS2) rail line
   father near Parliament ( Getty Images )

   The cost of the London-to-Birmingham leg of Britain’s proposed new
   railway, High Speed Two (HS2), is approaching £30bn – a third higher
   than previously estimated.

   The team behind the project, HS2 Ltd, has been asked to submit updated
   costs of the railway’s first phase to the Treasury ahead of the
   Comprehensive Spending Review (CSR) later this month.
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   trains and the phase two link from Birmingham to Leeds and Manchester,
   is likely to be £70bn to £80bn, up from £50bn in 2011 prices.
   An artist’s impression of an HS2 train, due to start running in 2026

   The project’s supporters argue the revised cost does not mean the
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   account of economic changes as the project develops. The Department for
   Transport (DfT) has also claimed that every £1 of public money spent on
   HS2 will provide £2 of benefit to the wider UK economy, and many people
   working on HS2 believe this to be a conservative estimate that plays
   down the railway’s boost to the country.

   But anti-HS2 campaigners are furious at both the amount of public money
   being spent on the railway and the fact that it will carve through the
   English countryside. HS2 has already been hit by cost over-runs: in
   2013, HS2 Ltd admitted it had got its sums wrong, increasing phase
   one’s budget alone by more than £5bn.

   A spokesman for the Stop HS2 campaign said that the new price estimate
   proved the project is a “white elephant”. Ministers are already under
   pressure from Conservative backbenchers whose constituencies are
   located along the HS2 route to axe the project. They are likely to vote
   against a bill authorising HS2’s construction when it reaches the floor
   of the House of Commons next year.

   A source who has worked on HS2 added the project’s costs means other
   transport projects will be squeezed during the 2020s. The source added:
   “The DfT is not a protected department [from spending cuts]. Somebody’s
   going to have to find £25bn if HS2 ends up costing around £75bn - and
   that means roads or rail will have to be cut.”

   The source added it is “a logical planning assumption that HS2 will be
   flogged” to the private sector to run it shortly after the second phase
   is completed in the 2030s. It is understood there have been some
   informal discussions at HS2 Ltd on future ownership, which could see
   foreign companies run the railway.

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   Industry sources believe HS2 will ultimately be sold to the private
   sector in concessions lasting around 30 years, as happened at HS1,
   which links London to the Channel Tunnel. Two Canadian pension funds,
   Borealis Infrastructure and the Ontario Teachers’ Pension Plan, paid
   £2.1bn in 2010 to run HS1 until 2040.

   HS2 is a much longer line and could be sold in up to three separate
   concessions, another source suggested, which could help recoup some of
   the project’s massive cost.
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   The Stop HS2 spokesman said: “These figures show that since HS2 was
   first announced in 2010, there has been a near doubling of the costs,
   and with trains not due to run for over another decade, who knows where
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   “A responsible chancellor would be asking serious questions about
   whether it is really worth it, but instead Mr Osborne is cooking the
   books to invent benefits which simply aren’t there to make HS2 look
   more palatable, at the same time as drawing up plans to flog it off the
   private sector at a fraction of the cost.

   “If HS2 was really worth it, investors would be lining up to build it.
   The fact they are not shows this is nothing more than a vanity project,
   the costs of which will continue to spiral.”

   A spokesman for HS2 said: “HS2 Ltd cannot comment on speculation around
   the content or outcomes of the spending review.”
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 Created with Sketch. HS2 dubbed white elephant as costs ratchet up by a third

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   Protesters demonstrating against the High Speed 2rail line father near
   Parliament
   Getty Images
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   An artist’s impression of an HS2 train, due to start running in 2026