Fur­ther ques­tions raised of eco­nomics of HS2

Se­lect com­mit­tee chair­man writ­ten to trans­port sec­re­tary

Buckinghamshire Advertiser - - NEWS - by Qasim Per­acha qasim.per­acha@trin­i­tymir­ror.com Twit­ter: @qasimper­acha

THE chair­man of the Trea­sury Se­lect Com­mit­tee, An­drew Tyrie MP has pub­lished an­other let­ter to the trans­port Sec­re­tary to ex­press con­cern over HS2.

In a let­ter dated Jan­uary 4, Mr Tryie tells Chris Grayling MP, that a re­cent anal­y­sis pub­lished by the Depart­ment for Trans­port (DfT) “raises fur­ther ques­tions on the eco­nomic case for HS2”.

The DfT’s re­port said there has been an in­crease in the ben­e­fit-cost ra­tio on the ba­sis of in­creased busi­ness de­mand, whilst Mr Tyrie ar­gues that with­out this lat­est data, “HS2 is scarcely worth the can­dle” adding that by the depart­ment’s own guid­ance, it would be de­liv­er­ing “low” value for money.

“The cred­i­bil­ity of this sharp rise in fore­cast de­mand is cru­cial to the whole HS2 project” added the MP for Chich­ester.

Mr Tyrie then pro­ceeded to pose sev­eral di­rect ques­tions for the Trans­port Sec­re­tary, ask­ing what new ev­i­dence there is for an in­creased de­mand that wasn’t avail­able in Novem­ber 2015, and how con­fi­dent they are that the fore­casted growth will not be re­versed.

He also ques­tioned what is be­ing done to im­prove HS2 Lim­ited’s fore­cast­ing model.

He then con­tin­ued to chal­lenge the fore­cast of high busi­ness de­mand for the ser­vice be­fore point­ing out that the rail de­mand fore­casts are pred­i­cated on the Of­fice for Bud­get Re­spon­si­bil­ity’s out­look for the econ­omy and that the fore­cast was in fact down­graded on Novem­ber 24.

Com­ment­ing on the cor­re­spon­dence, Mr Tyrie said: “The Depart­ment claims that it has been un­der­es­ti­mat­ing the growth in pas­sen­ger de­mand in sup­port of the eco­nomic case for HS2.

The Trans­port Sec­re­tary needs to ex­plain why the lat­est pro­jec­tion for growth in de­mand will be any more re­li­able than its pre­de­ces­sor. Over the last seven years we’ve had six of these – each dif­fer­ent.

“In the last Par­lia­ment, the Trea­sury Com­mit­tee ex­am­ined the pro­pos­als for HS2.

A lack of rigour in the eco­nomic case was man­i­fest. On the ba­sis of the ev­i­dence pro­vided so far, many peo­ple re­main to be con­vinced that the £55bn pro­jected costs for HS2 of­fers bet­ter value for money than a lower speed, lower cost al­ter­na­tive.”

It is not the first time the trea­sury com­mit­tee chair has raised con­cerns over HS2, with a let­ter writ­ten in Septem­ber to the Trans­port Sec­re­tary stat­ing: “HS2 has the weak­est eco­nomic case of all the projects within the in­fra­struc­ture pro­gram, yet it is be­ing pushed through with the most en­thu­si­asm.”

The let­ter also asked whether the depart­ment had ex­am­ined the eco­nomic case for a higher ca­pac­ity at lower speeds be­fore cit­ing a twelve year old study com­mis­sioned by the Strate­gic Rail Au­thor­ity that pro­posed the route through the Chilterns.

“The Govern­ment has failed to ex­plain clearly why it re­gards this feasi-

Many re­main to be con­vinced that HS2 of­fers bet­ter value for money

bil­ity study as pro­vid­ing the ev­i­dence to se­lect the cor­ri­dor through the Chilterns.”

Con­cern: Trans­port sec­re­tary Chris Grayling

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