Johnson aims to rein in HS2 cost by £34bn
Prime Minister confirms project will go ahead, and pledges to deliver it as efficiently as possible
Boris Johnson believes he can deliver High Speed 2 and save £34billion as he prepares to appoint a minister to the project. A review of HS2 suggested the rail link could ultimately cost £106billion, but the Prime Minister is convinced he can do it for £72billion by reining in spending and giving private firms the chance to build and own stations. Mr Johnson confirmed yesterday that the line would go ahead.
BORIS JOHNSON believes he can deliver HS2 for £34billion less than the current “worst case” estimates as he prepares to appoint a full-time minister to take charge of the project.
An official government review of HS2 suggested the final cost of the high speed rail link could reach £106billion, but the Prime Minister is convinced he can do it for £72billion by reining in spending and giving private firms the chance to build and own stations.
He confirmed yesterday that HS2 will go ahead, with track-laying on the first phase between London and Birmingham beginning in April. He said the Cabinet had had the “guts to take the decision” despite opposition from within the Tory Party and elsewhere.
To avoid “further blow outs” in the cost or timescale, measures will be taken to “restore discipline to the programme”, including the appointment of a minister for HS2 who will be named in tomorrow’s Cabinet reshuffle.
Mr Johnson said phase one – London to Birmingham – would go ahead straight away, together with phase 2a, from Birmingham to Crewe, with phase 2b, the two spurs to Leeds and Manchester, following after a review of their costings and routes.
Ministers are targeting 2029-31 for the opening of phase one, with phase two currently due for completion by 2040 at the latest, but Mr Johnson is determined to bring those dates forward so that everything is completed by 2035.
A new Integrated Rail Plan will ensure that the second stage of phase 2 is built in conjunction with the £39billion Northern Powerhouse Rail project linking Liverpool to Hull, creating “High Speed North”, Mr Johnson said.
The line will stop at Old Oak Common, six miles short of central London, for five to seven years because the Euston station terminus, described as a “shambles” by Mr Johnson, must be rethought by a new stand-alone body.
Downing Street said the entire HS2 project could be delivered for £72billion, which could rise to a maximum of £98billion if the entire budget for contingencies is used up. The Government-commissioned Oakervee Review of HS2, published yesterday, put the cost at up to £106billion.
The Government believes the project will add £1.40 to the economy for every £1 spent, though it would take 60 years to recoup that return. The Oakervee Review believes HS2 could deliver £2.10 for every £1 spent if commercial opportunities are exploited to the maximum.
One option recommended by the review, chaired by Douglas Oakervee, the former HS2 chairman, is for private firms to build stations, cutting the cost to the Government. The investors would recoup their money through rent on shops and offices on the sites.
Government sources said the recommendation for privatelybuilt stations was under consideration, but suggested the savings would be hundreds of millions rather than billions.
The review also recommended cutting costs by running 14 trains per hour rather than the 17 originally targeted.
Dozens of Tory MPS remain opposed to HS2. Michael Fabricant warned that it would cause “immense” damage to the countryside.
Setting out his reasons for approving HS2 – which he opposed when he was Mayor of London – Mr Johnson said: “Poor management to date has not detracted, in my view, from the fundamental value of the project.
“The review recently conducted by Douglas Oakervee... leaves no doubt of the clinching case for high-speed rail.
“A vast increase in capacity with hundreds of thousands of extra seats making it much easier for travellers to move up and down our long, narrow country. And that means faster journey times, not just more capacity.”
He said the new rail lines – along with a £5 billion investment in buses, bus routes and cycle lanes – would “deliver a new anatomy of British transport”.