HS2 Questions

Examining the issues around the proposed High Speed 2 route

Could HS2 be a Nimrod?

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The problem with major long term projects is that technology, events or escalating costs can overtake them. This is a particular risk for an all-or-nothing project like HS2, compared with a more incremental approach to transport investment. HS2 is not expected to start service until 2026, the benefit case is calculated to 2086, and technology is changing fast.

Will HS2 be viable in 2026?

The question is not whether rail will disappear but whether the HS2 technology and cost structure will stand the test of time. We still want to fly, but Concorde turned out to be an aviation cul-de-sac.

There are two main issues to consider. The first is the cost structure and the willingness of governments to subsidise a High Speed Rail network. “Virtually no HSR lines anywhere in the world have earned enough revenue to cover both their construction and operating costs,” said the US Congressional Research Service in 2009. The US Amtrak’s Inspector General reported that six European nations’ operations required a subsidy of $42bn p.a.

This is already an major topic of discussion in parts of the world. In France, the high speed Paris-Milan line scheduled to open at the end of 2011 is now to be operated with regular speed trains; “The high speed train is longer such a good deal.”[1] Meanwhile in China, “The new [Chinese] high-speed lines will only incur losses while providing little or no relief to the existing transportation network.”[2]

Will HS2 be overtaken by technology?

The second threat is technology change. The success of HS2 depends on rapid growth in demand especially from business users (from whom most of the benefit derives).

We are at the cusp of a new communications revolution. Already half of my own board meetings are audio conferences. In the last year I’ve started to suggest Skype video calls in place of physical meetings. Webinars offer benefits over physical seminars: time, travel, venue costs and quiet interaction with the speaker. With another 15 years and ultra high speed broadband, the opportunities for and quality of electronic business interaction will only have accelerated.

Avoiding travel is now a Government objective. As Philip Hammond said,”…Norman Baker is working… at reducing the demand for travel, particularly for business. Encouraging home working; promoting the use of high-speed broadband for both business sand leisure purposes and encouraging the uptake of video conferencing as an alternative to long distance travel.”‘[3]

We don’t know what the future holds, but we can expect travel costs to escalate and technology to continue to progress rapidly. HS2 protestors claim the project will prove a white elephant. Could it be another Nimrod with an incoming Government in 2020 calling the project to a halt?

[3] IBM START Conference, speech by Rt Hon Philip Hammond, 10 September 2010 http://www.dft.gov.uk/press/speechesstatements/speeches/hammond20100910


Written by hs2questions

January 27, 2011 at 10:57 am

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  1. Hi, this is a comment.
    To delete a comment, just log in, and view the posts’ comments, there you will have the option to edit or delete them.

    Mr WordPress

    January 27, 2011 at 10:57 am

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