HIGH SPEED RAIL

Railway people lobby hard for High-Speed Rail. Here are some of our responses to that.

SCOTLAND ON SUNDAY 6th July 2008

Our letter in response to an article in Scotland on Sunday follows.  Elements of that have been sent to the Treasury, the Transport Committee of the House of Commons, and to the conservative shadow Transport Minister, Theresa Villiers.

Here in the south there are cheers at Network Rail’s intention to press for 5 new high speed lines and regrets that the Government has “gone lukewarm” on the idea.  Thank goodness it has.  After all the cost would exceed £100 billion, none of which would ever be recovered from the fare box.  That is equivalent to £4,000 in taxes from every household in the land.  The resultant toy would do nothing to reduce road congestion (half of all car journeys are less than 4.3 miles long, 90% are less than 20 miles long).  Furthermore the facility would be used by the rich at least 5 times as much as by the poor, or at least that is the case with normal rail.

Scotland, or its business community, is now lobbying fiercely for £30 billion of taxpayers money for a high speed line from London to Edinburgh.  £30 billion is equivalent to over £10,000 for every household in Scotland.

If speed is everything they could remove the 70 mph limit on motorways.  Express coaches may then cruise at 90 mph, as they did when the M1 was first opened.  The safety record was excellent.  The journey from London to Edinburgh may then take 4 hours provided the system is managed to avoid congestion.  Alternatively a dedicated high speed road could be built at a fraction the cost of rail, particularly if the railway right of way were so converted.

However, before any of that is considered we have to ask – why on earth should taxpayers fund schemes that the private sector never would?

COMPLAINT REFERENCE NATIONAL EXPRESS ADVERT OF 2008

Copied to the Treasury and others

National Express placed a full page advertisement; Click here to view, in the New Scientist on 24th May, The Week on 31st May, and variously in the Sunday Times and other papers. The advertisement shows a picture of a plane and a train.  The caption beside the plane said “Wha-hey, look at that carbon go!” The caption by the train said “Significantly lower carbon emissions with National Express East Coast Trains”.

We have complained to the Advertising Standards Authority about that. The bones of our complaint are that, far from high-speed rail having lower emissions than air travel precisely the reverse may be the case. To see the detail of our complaint click here.

GREENGUAGE 21 www.greengauge21.net

Local Transport Today reported on, 9th February 2006, that "GreenGuage" is relying on a cost benefit analysis by Atkins claiming that the proposed North South High Speed line has a B/C ratio of 2.1 upon capital of £48.2 billion. In response we wrote and were published as follows:

Prior to any Cost Benefit, there should be some relatively simple financial analysis. E.g. 20 years may be the longest that any business would be prepared to wait for repayment of capital. Repaying GreenGuage's £48.2 billion at the Treasury Discount rate of 3.5% over that time period would cost £3.4 billion annually. Operating and maintenance costs may amount to (1 to 2)% of capital employed increasing the annual cost to £(3.9-4.4) billion. If there were as many as 20 trains per day in each direction each carrying 500 people for 300 days per year then the return fare required to cover costs has the range £(1,300-£1,500). In comparison the most expensive standard class London to Edinburgh return costs £210 with executive first class costing £317. Hence it seems clear that fares for the GreenGuage proposal would have to be massively subsidised by the taxpayer. Why would we want to do that? After all, for rail as a whole those from the top quintile of household income travel 4 times as far by rail as do those from either from either of the two bottom quintiles.

We conclude that the GreenGuage proposal is a fairy story that would become a financial disaster if ever it were to be built.

NETWORK RAIL

On 8th May 2006Iain Coucher, the deputy director of Network Rail read the paper attached at the High Speed Rail Conference.

In response we circulated as follows:

This note is a critique of the case that Mr Coucher, Network Rail's Deputy Director, made for the High speed London to Scotland rail link at the conference of 8th May 2006.

After canvassing costs ranging from £8 m to £50 m per km Mr Coucher's said that "a brave estimate suggests..... (they) could get the construction price down to between £15m to £19 m per km", providing a project cost "in the range £11 bn to 14bn". We comment (a) the previous estimate for the High Speed line was £36 bn (b) the costs for the West Coast Main Line modernisation programme spiralled from £2.35 bn to £13 bn before being cut back to perhaps £7 bn. Against that background we suggest that Mr Coucher's phrase "a brave estimate" probably means "increase these costs by 200% to 300%, i.e. by a factor of three to four".

Mr Coucher then speculates that the trains will cost £13.9 million each based on the TGV Duplex (double deck). Those trains contain 8 carriages and 545 seats. Mr Coucher also says the trains are to run at 30 minute intervals providing 20 per day each way. If all of those ran full every day of the year then they would offer 8 mn seats (4 million each way). That compares with Mr Coucher's hoped for demand of 17 mn to 24 mn passengers by 2016 and 24 mn to 34 mn by 2031. Hence, like the construction costs, the bill for the trains, set by Mr Coucher at £650 million, should be increased by a factor of three to four, unless the seats are to be removed so that all passengers may stand all the way.

As for the forecasts, Coucher says the target is to capture 90% of the 5.5 m Anglo Scottish air journeys. That may be the case but to achieve the hoped for 30 bn passengers by 2031 implies a most extraordinary growth.

On top of all that, fares are supposed to cover the capital, maintenance and running costs of the entire operation, something rail has never achieved for over half a century.

Let us suppose that the system could actually be built for £20 bn. If that were to be repaid at the Treasury Discount Rate of 3.5% over 30 years along with the operating and maintenance costs amounting to 2% of capital then annual costs would total £1.5 bn. Further, let us suppose there could be 6 million passengers per year (implying 410 passengers per train on 20 trains per day each way for 365 days). In that circumstance fares would cover the annual cost if single tickets cost £250 each. If the capital cost were £40 bn then returns would need to cost £1,000 each.

Bravely, Mr Coucher does say that we must presume that the High speed Line will never be built, unless there is a robust business case for doing so. However, we query what, in Mr Coucher's view, a robust business case is. After all, the so-called business cases presented as evidence at the public inquiry into the West Coast Main line were devoid of both capital and maintenance costs.

Against that background we believe Mr Coucher's paper was irresponsible.

Copies to:

Chairmen of Lloyds, Barclays, HSBC, Royal Bank of Scotland .

MPs Brian Binley, Sally Keeble, Richard Osborne, John Redwood, Gwyneth Dunwoody

Media , The Observer, The Sunday Times, The Financial Times, The Times, The Telegraph, The Guardian, The Independent, The Business, The Economist, Daily Mail, Daily Express, Mirror, The BBC, ITV news, Simon Jenkins. Local Transport Today.