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HS2 LETTERS

These letters are somwhat repetitve, making similar points time and again.  Those to the Times are generally not published.  The others often are.  All, or nearly all, have been copied to the Transport Committee of the House of Commons.  See also other letters to The Times at Topic 23

Paul Withrington BSc, MSc. MICE. C.Eng


Ref. HISPEED42
20th March 2014

The Times - No HS2 please

The five lead letters (No HS2 please, we are British – and cautious, March 20th) are notable for the complete absence of data.  So, let us be clear.  The cost will be circa £80 billion including the trains and the otherwise omitted links to the stations.  That is equivalent to £3,000 for every household in the land.  The actuarial loss faced by those standing in the opening year of 2036 after accruing the fares out to the remote year of 2096 will be similar (Note 1). 

The claim is that the proposal will generate 100,000 jobs, although many, if not most, will be relocations.  If we believe the 100,000 then the cost per job will amount to £800,000.  How many working lives will that vast subsidy destroy in that part of the economy which makes a profit?

 The scheme is said to be “transformational”.  However, it is only new or generated trips that can contribute to that.  These will amount to a trivial 1.5% of existing passenger-journeys by rail and to an even more trivial 0.05% of all passenger-journeys (note 2).  These percentages sabotage the notion that this thing can be transformational in any sense except perhaps that it will extract £3,000 from every household in the land, 99% of which may never use a high speed train.

The claim made in the KPMG report, that the system will generate £15billion per year in wider economic benefits, implies that the new or generated business and commuter trips will yield 14 times the benefits derived from the average for the nation as a whole, with the further implication that every existing commuter or business trip using the West Coast Main Line is yielding circa 30 times the average – an absurdity which illustrates how ludicrous the £15billion is (notes 3 and 4).

Is it not time for those who so shamelessly promote this thing to be prosecuted for mis-selling on a gigantic scale?

Yours etc

Notes and calculations:

  1. Table 15 of the October 2013 economic analysis provides a net loss to the Government of £31.5bn at the 2011 base price and discount base.  Rolling that up at the Treasury Discount rate of 3.5% to the opening year of 2036 yields £74bn representing the actuarial loss at 2011 prices faced by those standing in that year, assuming the forecast fares out to the remote year of 2096 actually arise.
  2. HS2 Ltd also say that the project will generate 76,000 new passengers-journeys per day, (FoI request 13-873).  The 76,000 corresponds to roughly 22.8 million per year.  It is only those new trips which can be “transformational” since all the rest (obviously) pre-exist.   There are currently 1.5 billion passenger-journeys per year by surface rail, and 43.5 billion passenger-journeys by all modes (walk and cycle excluded).  Hence generated, or new, passenger-journeys may account for a trivial 1.5% of all surface-rail journeys and for an even more trivial 0.05%, or one in 2,000, of all passenger-journeys.  Clearly that cannot be transformational
  3. As above, generated, or new, trips total 76,000 per day.  If 40% are for business or commuting (Para 5.2.13 of the Aril 2012 Demand and Appraisal report provides 33% for business. NTS data suggest adding 25% for commuting for longer distance trips) they will number 30,400 per day.  For such trips there are an effective 255 days per year.  Hence the annual new business plus commuter trips will be circa 7.75 million. Dividing KPMG’s £15bn by the 7.75 million provides an average value for these new business or commuter trips of circa £1,930, or circa £4,000 per round trip.  The National Travel Survey provides 177 such trips per head per year or £10.6 billion for the nation as a whole.  The GDP is circa £1.5bn.  Hence the value per trip is £141, 14 times less than the £2,600 for these marginally generated HS2 trips, illustrating how unbelievable the £15bn is. After all:
  • The £4,000 per round trip is in excess of what would have been achieved had the individuals stayed in their offices.
  • These new trips arise only because journey times will have been reduced somewhat.
  • Pre-existing trips did not need such an encouragement.  Hence they will have higher WEBs, possibly double the average for the new trips, implying an average value attributable to a pre-existing business or commuter trips on the West Coast Main Line circa 30 times that for the nation as a whole.

Charitably KPMG did not carry out such a reality test.  Had it done so it would never published the £15bn, or at least not with a straight face.

(4)     In October 2013 we asked HS2 Ltd, under freedom of information legislation, to provide the proportions of trips which were for business, commuting and leisure.  That data must be available since, without it, the economic analysis could not be carried out.  

HS2 Ltd claimed it does not hold the information.  We have continued to press for the data but without success.  The date is now 20th March 2014.  We regard this failure on behalf of HS2 Ltd as symptomatic of an organisation which will do all it can to prevent key data from reaching the public thereby suggesting corruption at the heart of the organisation. 

(The 30% we have used under in note (3) is consistent with old reports).


 Ref. HISPEED41
14th March 2014

The Times - Push off HS2

The railway lobby’s letter of 14th March encourages the nation to “Push on”. Nothing could be more damaging.  HS2 Ltd claims that the proposal will be “Transformational”, generate employment and cure the north south divide etc. Nothing could be further form the truth.

The effect on the nation, supposing anyone can believe the passenger forecasts, will be to increase passenger-journeys by rail by a trivial 1.5% and passenger journeys by all modes by an even more trivial 0.05%, or one in 2,000.  "Transformational" - Ha, Ha.

The Y-network is supposed to create 100,000 jobs although many, if not most, may be no more than relocations.   The cost, including the trains and the otherwise omitted links to the new stations, will be £80 billion, equivalent to £800,000 per job. How many will that destroy in that part of the economy which makes a profit?

Job creation?  You must be joking.  Jobs for the boys more like it. Applying these HS2 principles to the nation as a whole would bankrupt us all in no time.


Ref. times/RAIL POL10
Date 8th February 2014

The Times - DAWLISH

The Headline “Storm force closure of the West’s lifeline” in The Times of 6th Feb, is somewhat overdone.  Here is the reality:

Penzance to Paddington provides one train an hour (11 all day). The journey takes five and a half hours.  The open return costs over £120.  The typical passenger load on South Western Trains is a 140 people [1].    

Torquay to Exeter (through Dawlish) offers three trains per hour.  However, a recent picture on TV showed a train with only two carriages on the affected stretch. 

Instead of this railway being a “lifeline” it is instead an extraordinarily expensive, fully working, modernised, transport museum.

Further, it is amusing to note that the money now earmarked for the flood defences in the area, amounts to perhaps £130 million or nearly 400 times less than the £50bn required for HS2, a scheme which, far from being transformational, will increase the nation’s passenger journeys by a vanishingly small 0.05%[2]. 

The flood defences may very well be very much more transformational than that.

Footnotes

1] ORR Data shows  First Great Western Trains averaging 140 passengers.

[2] HS2 is now said to generates some 76,000 passengers per day, (FoI request),  corresponding to roughly 22.8 million per year.  It is only those which can be “transformational”, since all the rest exist already.   In contrast there are currently 1.5 billion passenger journeys per year by surface rail, and 43.5bn passenger journeys by all modes.  Hence, HS2’s supposed generated traffic amounts to 1.5% of all surface rail journeys and to 0.05%, or one in 2,000, of all passenger journeys. Transformational? HA, HA.


Ref. HISPEED40
26th October 2013

The Times  - HS2

Apart from claiming that time on a train is entirely wasted, the January 2012 Economic Assessment allocated benefits of £5.2bn to improved reliability, as though the trains cannot me made to run on time without building a high speed rail network, and £5.5bn for improved access to stations etc, for heavens sake. 

HS2 Ltd now claim £15bn per year in Wider Economic Benefits.  Dividing the £15bn by the relevant HS2 data yields an astonishing £550 for each generated trip[ 1] or £1,850 for each generated business trip[2].

To appreciate how unrealistic these values are, multiply the £550 by the annual trips made by network rail as a whole[3]. That produces £800 billion, or more than the half the nation’s entire GDP.  Alternatively multiply the £1,850 by the nation’s commuter and business trips. That produces £3,400 billion, if applied to business trips alone, or £19,600 billion, if applied to the sum of business and commuting trips.[4]

The numbers are, of course, absurdly large,[5] indicating that, had KPMG and HS2 Ltd carried out a reality check, they would never have suggested the £15bn.

Is it not time for this vastly expensive and misconceived proposal to be thrown into the waste paper basket, and for penalties to be placed upon those who have led the analysis, irresponsible as it is in all its detail?

Footnotes

[1] The WEBS generated by the proposal can only be attributed to the generated trips.  Paragraph 3.2.1 of the January 2012 Economic analysis provides 270,000 trips per day in and out of London plus 110,000 between regions, a total of 380,000.  Table 2 provides 24% as new trips.  Hence generated trips number 91,000 per day.  Dividing the £15bn by the 91,000 and by 300 effective days per year provides £550 per trip. 

[2] Paragraph 6.4.8 of the Demand and Appraisal Report on HS2 to West Midlands, by WS Atkins dated April 2012, provides that 30% of trips are business trips.  Hence, if the £15bn is attributed to them alone we have £15bn divided by (91,000 x 0.3 x 300) = £1,850 per business trip.

[3] The ORR provides 1,460 million in 2012.  £550 x 1,460 million = £800bn

[4] National Travel Survey Table 0403 provides 146 commuter trips per head per year and 31 business trips.  Multiplying by the 60 million population provides total trips.  Hence we have a value of £1,850 x 31 x 60 million = £3440bn if the £1,850 is applied to business trips alone and £1,859 x (31 + 146) x 60 million = £19,647bn for all trips.

[5] Although the numbers are absurdly large the calculation is “conservative” since pre-exiting trips will have a higher value than that of those attracted by some reduction in journey time, possibly double.  (The classical theory is that the first marginal trip attracted by a reduction in cost is said to enjoy the same benefits as pre-existing trips.  The last so attracted is said to enjoy zero benefits (being entirely marginal).  Hence, typically, generated, or new, trips are assigned half the benefit if pre-existing trips).


 Ref. HISPEED39
12th September 2013

The Times - Capacity

The West Coast Main Line is so very much out of capacity that Virgins trains, with circa 500 seats, carry an average of only 165 people **.  Doubtless there is crowding at peak times but it was ever thus on road or rail.

Iain King’s letter (12th Sept) points to longer trains.  HS2 Ltd claim platforms are in too short.  Supposing HS2 is right, would it be worth tens of billions to save the passengers in end carriages the immense pain or walking towards more central ones prior to alighting?

Apart from the discredited notion that time on a train is entirely wasted, the January 2012 Economic Assessment allocated benefits of £5.2bn to improved reliability, as though the trains cannot me made to run on time without building a high speed rail network, and £5.5bn for improved access to stations etc, for heavens sake. 

Now they claim £15bn per year for Wider Economic Benefits, an amount that equates to nearly £700 for every passenger forecast to arrival at Euston.  Who would ever believe that, let alone the forecasts?

The charitably excuse for the presentations made by HS2 Ltd is that its staff are gripped by railway mania to the exclusion of reason.

** Note to editor.

The Office of the Rail Regulator’s data provides that Virgin Trains carried 5923 million passenger-km in trains driving 35.9 million train-km in the year 2011/12.  Dividing the passenger-km by the train-km provides the average of 165 passengers per train.


HISPEED38
3rd July 2013

The Times: Benefits fraud

The £44.1bn benefits from the January 2012 economic analysis (later detail is not available) were sourced as follows: £5.2bn for improved reliability, as though the trains cannot be made to run on time without building a high speed network, £6.7bn for relief of crowding, most of which could be solved by adding carriages to peak-hour trains and improved signaling, let alone balancing supply and demand by price, £5.5bn for “other rail user impacts”, such as better access to stations, for heavens sake, £2.1bn for other impacts, and £24.6bn for time savings, dependant on the discredited assumption that time on a train is entirely wasted.

Worse still, no risk factor is associated with the ludicrously high passenger forecasts requiring up to 18 1000-seat trains per hour.

The supposed 100,000 jobs created by the proposal will have cost £600,000 each but how many will that destroy in the part of the economy that makes a profit?

Why on earth are we contemplating this scheme?  It will be used mainly by the better-off whilst making a loss of more than £70bn, supposing the fares out to the remote year of 2093 actually arise.

Our view is that if accountants behaved as do these railway lobbyists then those accountants would soon be in prison.


 . HISPEED37
1st July 2013

The Times - Dear Mr Montgomerie

It is not that HS2 will not be needed.  Instead it is the fraud that the analysis is.  For example:

  1. The headline cost for the “Y” network, was, until a day ago, £33bn.  However, that excluded the trains at £8bn and tax at 20.9%, both included in the economic assessment.  Hence the headline should have been £50bn, not £33bn.
  2. The £44.1bn benefits from the January 2012 economic analysis (later detail is not available) were sourced as follows:
    1. £5.2bn for improved reliability, as though the trains could not be made to run on time without spending tens of billions on a high speed network
    2. £6.7bn for relief of crowding, most of which could be solved by adding a couple of carriages to peak-hour trains, reconfiguring the seating, and improved signaling.
    3. £5.5bn for “other rail user impacts”, such as better access to stations, for heavens sake.
    4. £24.6bn for time savings depending on the discredited assumption that time on a train is entirely wasted.
  1. Worse still, no risk factor was associated with the ludicrously high passenger forecasts requiring up to 18 1000-seat trains per hour.
  2. Then we have the ‘wider economic benefits’ – the supposed creation of 100,000 jobs.  However, those jobs will have cost £500,000 each.  How many will that destroy in the part of the economy that makes a profit?

At the more detailed level:

  1. Nearly half the benefits come from the second half of the 60 year evaluation period ending in 2093.
  2. Values of time etc. are presumed to increase in real terms at nearly 2% pa for ever and ever.  That trivial seeming assumption doubles the computed benefits.

Stewart Joy, Chief Economist to British Railways in the late 1960s or early 1970s wrote in his book ‘The Train that ran away’ that there were those “who were cynically prepared to accept the rewards of high office in the British Transport Commission and the railways in return for the unpalatable task of tricking the Government an a mammoth scale.  Those men”, Joy wrote, “were either fools or knaves”.  There were no libel actions but Joy had been forced out – too honest to work with railway men.

If accountants behaved as do these lobbyists then those accountants would be in prison.  Perhaps you can use this data to light the appropriate fire.


 

Ref. HISPEED36
4th February 13

The Times LETTERS,

HS2 AND DAFT HEADLINES

Your headline to letters of 30th Jan reads “HS2 is good for jobs but Brunel would have built it faster”.  Has your headline writer not realised that the 100,000 jobs allegedly created by the Y network will have cost half a million pounds each? 

The cost at opening will not be the current headline figure if £33bn but close to £50bn.  £8bn for the trains and tax at 20.9% have to be added.

Far from building this thing faster, Brunel would have had the foresight to replace the rail tracks with asphalt thereby tripling the productivity of the network, increasing the return on the cash spent by at least factor of six, and providing all London’s crushed surface rail commuters with seats at a fraction of current fares; see London here and some comparisons here

Likewise with the headline to Steve, Norris’s article ”We need fast decisions as well as fast trains” Jan 31st.  It’s no good having fast decisions unless those making them have at least a faint grasp of the numbers.


Ref. HISPEED35
31st January 2013

The Times

TAX AVOIDANCE

Reference your leader “Charity Shield”, 31st Jan, do we not have a high moral duty to avoid as much tax as possible, bearing in mind how it is wasted?  Think aircraft carriers with no aircraft let alone High Speed Rail.  

Paul Withrington

Note for history  "Charity Shield" was part of a tax avoidance scheme used by the rich.


 Ref. HISPEED34
30th January 2013

The Times

HIGH SPEED FRAUD

To appreciate the depths to which the railway lobby will go so as to dupe the politicians and the public consider this.

In evidence to the Transport Committee’s inquiry into the Future of the Railway, 2003-04, Bombardier told the committee that, “to carry 50,000 people per hour in one direction we would need a 35 metre wide road used by buses or a 9 metre track bed for a metro or commuter railway”.  The reality is that 1,000 express coaches per hour may offer 75,000 seats.  If those coaches were travelling at 100 kph in one lane of a motor road the headways would be 100 metres.

Similarly, Ralph Smyth, of the CPRE, when speaking at the Westminster Forum’s seminar “Getting UK rail on track”, 6th Dec 2012, said, “The SNCF say that a 2 track high speed railway has the same capacity as a 10 lane motorway”. Again the gap between the claim and reality is stunning.  If HS2 achieves the (wildly optimistic) forecast 18 1000-seat trains per hour in one direction there will be 18,000 seats. In contrast one lane of a motor road used by express coaches could, as we have seen, offer four times that.  Incidentally we heard at the same seminar that half of all rail commutes are less than 15 miles long……..

Professor Bent Flyvbjerg, founding director of the BT Centre for Major Programme Management, Oxford University, is calling for penalties on consultants who produce misleading forecasts.  Is there is any possibility of jail time for those, such as the railway lobby, who mislead Commons Committees on a mammoth scale or for those who give out wildly inaccurate data at seminars chaired by MPs and members of the House of Lords?   Think HS2, Atkins, Arup, Greengauge et al (Letter 30th Jan) …….


 Ref. HISPEED33
28thJanuary 2013

The Times

HIGH SPEED RAIL

The case for High Speed Rail is a fraud upon the nation. Here is why.

 The headline cost of the network out to Leeds and Manchester is £33bn.  That excludes the trains at £8bn and tax at 20.9%.  Adding those provides a headline of £50bn or £2,000 for every household in the land.  The financial loss, presuming the ludicrous passenger forecasts ever arise, will be of the same order.

 In January 2012 the reported benefits amounted to £44.1bn sourced as follows: - £5.2bn for improved reliability, which is nonsense - trains could be made to run on time without spending tens of billions. £6.7bn for relief of crowding most of which could be solved by adding a couple of carriages to peak-hour trains; £5.5bn for “other rail user impacts”, yet more nonsense and £2.1bn for “other impacts”.  The remaining £24.6bn depends on the discredited assumption that time on a train is entirely wasted.

 Worse still the benefits assume no risk associated with the wildly optimistic passenger forecasts - requiring up to 18 1000-seat trains per hour each way.

 Rather than returning £2 for every pound spent, as pretended, the return will be nearer 50 pence.  That at a time when rail is used overwhelmingly by the better off and when nearly half of us use a train less than once a year, let alone a high speed one.

 The 100,000 jobs that the Y network is said to create will have cost £500,000 each.  Instead of transforming the economy this scheme will destroy jobs in that part of it which makes a profit. 


Ref. HISPEED32
5rd October 2012

The Times
RAIL FIASCO AT HIGH SPEED

We have asked, under FoI legislation, for the costs to the taxpayer of the studies and promotional work for HS2 and the wider HSR network to the north.  I suspect the cost is now well over a billion pounds. My view is that the whole of it is a scandal.  Here is why:

  1. The headline cost of the “Y” network out to Leeds and Manchester is £33bn.  However, that excludes the trains costing £8bn and tax at 20.9%, both included in the economic analysis.  Adding those yields £48bn.  It is that that should be the headline cost not £33bn. £48bn amounts to nearly £2,000 for every household in the land.
  2. The January value for the Y’s benefits amounts to £44.1bn of which £5.2bn are for improved reliability.  This is nonsense: trains could be made to run on time without spending tens of billions.
  3. A further £6.7bn is for relief of crowding.  More nonsense; most of that could be solved by adding a couple of carriages to peak-hour trains.  If needed, lengthening platforms here and there would not cost billions of pounds.
  4. Another £5.5bn is for “other rail user impacts” and £2.1bn for “other impacts”; again suspected nonsense.
  5. That is a total of £19.5bn based on assumptions that do not withstand the light of day.
  6. The other benefits are from time savings, where the discredited assumption is that time on a train is entirely wasted.
  7. Worse still the benefits assume no risk associated with the wildly optimistic passenger forecasts - requiring up to 18 1000-seat trains per hour each way.
  8. The actuarial losses faced by every household in the land in the opening year of 2033 will be over £2,000.  If the (ludicrous) passenger forecasts, out to the remote year of 2093, do not materialize then the losses will be correspondingly higher.

All that at a time when rail is used overwhelmingly by the better off and when nearly half of us use a train less than once a year, let alone a high speed one.

Further, the underlying economic theory, the so called Willingness to Pay Calculus, upon which the economic analysis depends, is wrong. It compares the financial losses with the supposed benefits.  Those losses are the costs minus the incremental fares and allow for the changes in tax take.  However, the theory reduces to the absurd when it is realised that the incremental fares depend on where the economic boundary is arbitrarily drawn.  The right place is not round the railway or round the Government but round the nation as a whole.  When that is done the incremental fares and tax effects vanish, as of course they should.  After all, fares and tax are transfer payments.  They are vital to a financial analysis but should play no part in an economic assessment where the intent is to compare resources with social benefits. Just try creating resources by passing a £50 note to your neighbour, you lose, he gains, net benefit nil.

Putting it otherwise, this “Willingness to Pay Calculus”, if true, would provide a basis for subsidising every loss making enterprise in the land.
Consider this:

If people were “Willing to Pay” the proposal would be profitable.  Instead there is a financial loss in the tens of billions.

Our view is that those promoting this scheme should be ashamed of themselves, perhaps open to prosecution for the fraudulent nature of the case and its vast cost to the taxpayer. (The franchise debacle springs to mind)

Yours etc.

Copied to: Sam Coates, Philip Pank and Jill Sherman

A version of this letter, which did not contain (1) above, also sent to the following on 3rd October:
Transport Committee.
David Lidington MP
Michael Ellis (MP for Northampton North).
Brian Binley (MP for Northampton South).
John Redwood MP.
Andrea Leadsom (MP for South Northants).
Selection at HS2 Ltd.


www.transport-watch.co.uk
Ref. Sundays\ICE20 HS2

 New Civil Engineer Published 3rd May 2012

HIGH SPEED RAIL IS A BLACK HOLE FOR TAXPAYERS’ MONEY

Alexandra Wynne’s article (19th April) points to a reduction is the BCR from the January 2012 value of 1.4 to 1.2 for HS2 and from 1.6 to 1.4 for the Y. 

My view is that those promoting this scheme should be ashamed of themselves. Already over a billion pounds of taxpayers money has been spent on a scheme which will make a financial loss in the tens of billions. 

The January value for the Y’s benefits amounts to £44.1bn of which £5.2bn is for improved reliability.  This is rubbish: trains could be made to run on time without spending tens of billions.

A further £6.7bn is for reduced crowding.  This is also rubbish; most of that could be solved by adding a couple of carriages to peak-hour trains.

Another £5.5bn is for “other rail user impacts” and £2.1bn for “other impacts”; again suspected rubbish. 

That is a total of £19.5bn of rubbish – and that is before noting that time is not entirely wasted on a train.

Worse still the benefits assume no risk associated with the wildly optimistic passenger forecasts - requiring up to 18 1000-seat trains per hour each way.

The losses, supposing the ludicrous passenger forecast arise, will be over £2,000 for every household in the land.

That at a time when rail is used overwhelmingly by the better off and when nearly half of us use a train less than once a year, let alone a high speed one.

Paul Withrington Director

Transport-watch

--------------------------------------------------------------------------------

Further and as not published: the underlying economic theory, the so called Willingness to Pay Calculus, cooked up by Professor Sugden of the University of East Anglia, is wrong. It compares the financial losses with the supposed benefits.  Those losses are the costs minus the incremental fares and allow for the changes in tax take.  However, the theory reduces to the absurd when it is realised that the incremental fares depend on where the economic boundary is arbitrarily drawn.   The right place is not round the railway or round the Government but round the nation as a whole.  When that is done the incremental fares and tax effects vanish, as of course they should.  After all, fares and tax are transfer payments.  They are vital to a financial analysis but should play no part in an economic assessment where the intent is to compare resources with social benefits. Just try creating resources by passing a £50 note to your neighbour, you lose, he gains, net benefit nil.


Date 12th January 2012
Ref. The Times/hispeed 31

The Times

HIGH SPEED RAIL.

The local paper asked ‘What does HS2 mean for Northampton’.  I reply - a tax hit of £160 million equivalent to £1,860 for every household in the land.  The financial loss is similar. Heaven knows how many jobs that will destroy in that part of the economy that makes a profit.

The alleged £2 of benefit for every pound spent, which the Transport Secretary, Justine Greening, prattles about, depends, ludicrously, on a full train every three and a half minutes all day in both directions throughout the year for ever and ever.  Moreover, the £2 is not in any balance sheet.  Instead it is the notional value of time savings, reduced overcrowding and improved reliability etc.

The fact that high speed rail is “being embraced around the world” is no more a basis for doing the same than for a lemming to follow the rest over a cliff.

......................................

Note to editor

The “Y” costs £33bn excluding the trains and tax.  Adding those provides £49.5bn.  Dividing by the 26 million households yields £1,900, or, with a population of 60 million, £83 per head.

The losses in the cost benefit table amount to £25.2bn at the 2011 price and discount base. Rolling that up at the treasury discount rate to the opening year, 2033 for the “Y”, yields £54 billion - after believing the ludicrous passenger forecasts (requiring up to 18 1000-seat trains per hour each way) and accruing fares out to the remote year of 2093.


 Date 9th January 2012
Ref. The Times/hispeed 30

The Times

GOVERNMENT WASTE and RAIL

Whitehall waste, 9th Jan, is small beer compared with the amounts spent on projects that make massive financial losses on the unreal assumption that something the public will not pay for is a benefit.

Examples include the £16bn Cross Rail link and the proposed £32bn High speed line to Manchester and Leeds.  Adding for trains and tax raises the latter to £45bn, equivalent to £1,700 for every household in the land.  The financial loss, after accruing fares out to the remote year of 2093 will be of the same order – destroying jobs across the land in that part of the economy that makes a profit.

The affair reminds me of Stewart Joy, chief Economist to British Railway’s in the 1960’s. He wrote in his book, ‘ The ‘Train that Ran Away’, that there were “those in the British Transport Commission and the railways who were cynically prepared to accept the rewards of high office in return for the unpalatable task of tricking the Government on a mammoth scale.  Those men”, Joy wrote, “were either fools or knaves” – and so it is today.

 Copy to:

The Rt. Hon, Justine Greening MP, Secretary of State for Transport Greening
John Redwood MP
Brian Binley MP
Michael Ellis MP
Andrea Leadsom MP
Treasury
Transport Committee 


 Date 1st July 2011
Ref. Sundays\ICE19 HS2

New Civil Engineer

HS2  - A LONG TERM SCAR

 One of the most specious arguments for high speed rail is that “France has one” (A G Mordey’s letter of 30th June).  That argument would have traction if it could be shown that the immense expenditures in Europe had actually benefited the nations concerned.  However, no such evidence, beyond the vacuous declarations of politicians and of those who built the things, exists.  If anything the contrary is the case.  For example, Spain, with an HSR network likely to exceed 3,000 km, has a 20% unemployment rate.  Perhaps its parlous state would be better had the vast sums expended on these loss making projects been left in private hands.

The construction cost of HSR to Leeds and Manchester is £32.2b.  Adding, £5.3b for rolling stock, and multiplying by the market prices adjustor, yields £45bn, or £1,700 for every household in the land. The financial loss after accruing fares and costs out to an astonishing 2092, is £17b at the 2009 price and discount base.  Rolling that up at the Treasury Discount rate to 2030 yields £35b or £1,340 per household.   How many jobs will that destroy in that part of the economy that makes a genuine profit?

HS2 to Birmingham is said to generate 30,000 jobs excluding the 10,000 for construction.  The cost, including the trains and market prices adjustor, is £24b, amounting to £800,000 per job.  Can anyone conceive of a more expensive job creation scheme? 


 Date 2nd September 2011
Ref. The Times/hispeed27

The Times

RAIL AND NURSERY RHYMES AND HIGH SPEED RAIL

Alice Thompson’s piece (High speed rail near your home?, I envy you) Dec 7th) reminds me of Frances Cairncross, Chair of the Institute of Fiscal Studies. In 1974 she wrote, ‘when trains are still the theme of nursery rhymes and children’s stories, it is small wonder that the railways have a romantic fascination for most adults.  Only years of nursery conditioning can explain the calm with which the public has accepted a bill of £3,000 millions (£41 bn at 2011 prices) to subsidise British Rail over the last decade’.

The reality is that rail costs the Government five to six times as much per passenger-mile or per tonne-mile as does the motorway and trunk road system whilst carrying just 3% of the nation’s passenger journeys.  Moreover each lane of the strategic road network is used three times as intensively as is each track of the rail network.  Even in central London and in the peak hour this network of steel is, in highway terms, substantially disused.

The High Speed rail proposals out to Manchester and Leeds will cost £45 billion, including the trains and tax.  The financial loss will be of a similar order. The losses will, of course, destroy jobs in that part of the economy that makes a profit.  Meanwhile those from the top quintile of household income will use the system five times as much as those for either of the bottom two quintiles whilst 99% of the population will use it less than less than once a year. 

Those in support please put their hands up.


 Date 27th May 2011
Ref. Sundays\ICE18 HS2

The New Civil Enigineer

HS2 STATISTICS

Following Stephen Tanno and Derek Godfrey (26th):- the first cost of HS2 plus the extensions to Leeds and Manchester, including the trains and the market prices adjustor, is £45bn at 2009 prices. That’s equivalent to £1,700 for every household in the land.  The financial loss after summing costs and subtracting fares out to 2092 (the end of the evaluation period) will be £17bn at the 2009 price and discount base.  Rolling that up at the Treasury Discount rate of 3.5% to 2030 yields £35.7bn. Rolling it up to 2092 yields circa £250bn – the opportunity cost lost by that year.

HS2 (London to Birmingham) costs £23.5bn including the trains and market prices adjustor.  That may create 40,000 jobs.  At £800,000 per job it’s perhaps the most expensive job creation scheme in the world.  Nobody knows how many jobs will be destroyed by the taxes required to fund this vast project.  Instead we do know that 99% of the population  will use it less than once a year.

We also know that it is the difference between cost and incremental fares that is compared with the supposed benefits.  That is an absurdity.  After all, passing £100 to the left creates no resources yet the assumption is that it does.  If extended to the rest of the economy the theory may make the case for subsiding every loss making enterprise in the land, thereby bankrupting the nation.


 Ref. Sundays\ICE20 HS2

New Civil Engineer, as published 3rd May 2012

HIGH SPEED RAIL IS A BLACK HOLE FOR TAXPAYERS’ MONEY

Alexandra Wynne’s article (19th April) points to a reduction is the BCR from the January 2012 value of 1.4 to 1.2 for HS2 and from 1.6 to 1.4 for the Y. 

My view is that those promoting this scheme should be ashamed of themselves. Already over a billion pounds of taxpayers money has been spent on a scheme which will make a financial loss in the tens of billions. 

The January value for the Y’s benefits amounts to £44.1bn of which £5.2bn is for improved reliability.  This is rubbish: trains could be made to run on time without spending tens of billions.

A further £6.7bn is for reduced crowding.  This is also rubbish; most of that could be solved by adding a couple of carriages to peak-hour trains.

Another £5.5bn is for “other rail user impacts” and £2.1bn for “other impacts”; again suspected rubbish. 

That is a total of £19.5bn of rubbish – and that is before noting that time is not entirely wasted on a train.

Worse still the benefits assume no risk associated with the wildly optimistic passenger forecasts - requiring up to 18 1000-seat trains per hour each way.

The losses, supposing the ludicrous passenger forecast arise, will be over £2,000 for every household in the land.

That at a time when rail is used overwhelmingly by the better off and when nearly half of us use a train less than once a year, let alone a high speed one.


Date 26th March 2011
Ref. Sundays\ice17 HS2 01

New Civil Enngineer

Roger Bastin, (17th) places those who object to HS2 in the same category as those who objected to railways in the days of the stage coach.  There is, of course, no comparison. The coach from London to Birmingham took a couple of days, to Glasgow three to five, “God willing”.   In contrast HS2 may cut half an hour off an 82 minute journey to Birmingham and an hour of one to Glasgow.

It is not the Nimby’s who are barking.  Instead it is those who believe the laughable forecasts.  The latest provides 240,000 passengers per day from Euston, should the network be extended to Leeds and Manchester.  The 240,000 would require a completely full 500-seat train every 3.75 minutes for 15 hours in each direction.  That Philip Hammond can believe such a thing is bizarre.  After all, he has HS1 as guidance.  The forecasts for that were 3 times as high as arose.  Perhaps those who are paid to promote this latest folly are aiming at a factor of five.


Date 2nd September 2011
Ref. The Times/hispeed27

The Times

HIGH SPEED RAIL VITAL FOR GROWTH?

Your leader of Sept 1st (In the County) says that the benefits from high-speed rail outweigh the cost of depletion to the landscape.  The passenger forecasrts for HS2 require a train every three minutes 20 seconds all day throughout the year in both directions.  How those who forecast such a thing keep straight faces is a mystery – probably linked to the tradition of the Englishman’s stiff upper lip.  That the politicians believe must be down to 1st class honours degrees in Greek. HS2 to Leeds and Manchester is said to cost £32 billion.  However that excludes the trains and tax.  Adding those provides £45 billion or £1,700 for every household in the land, 99% of whom will use the system less than once a year. Put simply – the project is madness personified.


Date 11th March 2010
Ref. hispeed16

The Times

 HIGH SPEED RAIL

 When Lord Adonis visited Southampton Station he complained that the cafe was closed at 8 pm.  Did he not notice that there were no passengers?  Is he unaware that half of us use a train less than once a year, let alone a high speed one, and that the top 20% by household income use rail five times as much as do those from the bottom 40% let alone that half of all rail journeys are less than 20 miles long?  Does he not realise that high speed may as well drain people from the dying north to the south rather than the reverse, let alone that high taxes destroy jobs?

 The economic justification hangs on counting incremental fares as benefits and upon the benefits of agglomeration and to the wider economy.  The inclusion of incremental fares is absurd since their value depends on where the economic boundary of the project is arbitrarily drawn.  Agglomeration may be a cost, rather than a benefit.  E.g. taxpayer’s subsidy to TfL and to rail journeys terminating in London amounts to £7.5 bn per year.  If agglomeration were a benefit London should fund that.  If it had to, let alone the other infrastructure, people may flee the capital and the overcrowded SE to reinvigorate the north thereby rebalancing the nation.

 Without those items no rail project would ever pass the cost benefit test. 


 Date 21/03/11
Ref. Economist07

The Economist High Speed Rail, HS2

Sir, the passenger forecast for the core network to Leeds and Manchester is ludicrously high,[1] implying a completely full 500-seat train every 3.75 minutes in each direction for 15 hours, 350 days per year.  That is on target to beat the forecasts made in 1998 for HS1, which are three times as high as have arisen[2].

The construction cost is put £30 billion.[3]  Adding for trains, £3b, and multiplying by the market prices adjustor, 1.209,[4] provides £40b, or £665 for every person in the land.  That is equivalent to a tax hit of £2.5b on metropolitan Birmingham, £1.5b on Greater Manchester, and nearly £half a billion on Leeds,[5] let alone the running costs.  As for regeneration, most of that will be in London at the expense of the North.  Furthermore 99% of us will use HS2 less than once a year[6], and those who do will be overwhelmingly from the better off.[7]

Philip Hammond MP (Letters, 17 March) believes “High Speed Two” will “transform our economic geography”.  Instead, this proposal will be a millstone round the necks of taxpayers for ever.

Paul Withrington BSc. MSc. MICE. C.Eng

Director

Notes to editor. 

Governor Rick Scott of Florida turned down Federal Funding for his high speed line partly because “two out of three high speed rail projects inflate passenger forecasts by an average of 65%”[8].

The footnotes, and the note above are there for comfort. They would not, I dare say, form part of any published letter.  However, if desired they could be reduced and the letter expanded. 


[1] HS2 covers  the 128 miles that ends in Birmingham. If that alone were built then para 2.2.3 of the Economic case available here http://highspeedrail.dft.gov.uk/sites/highspeedrail.dft.gov.uk/files/hs2-economic-case.pdf provides a passenger forecast of 136,000 per day in 2043.  That requires a completely full 500 seat train every 6.5 minutes for 15 hours in each direction.  Para 2.2.3 provides 240,000 passengers per day if the core network is built.  That requires 500 passengers in each direction every 3.75 minutes for 15 hours a day.

[2] Figure 1 of 38th Report of 2005/6 of the House of Commons Committee of Public Accounts – forecast made in 1998 provides 21.4 million but only 7.3 million arrive.

[3] Page 9 of the Command Paper of March 2010

[4] The WE TAG - See para 6.3 here http://www.dft.gov.uk/webtag/documents/expert/unit3.9.2.php.  Also the source spread sheets provided by HS2 via a FIO request.  

[5] Populations:  UK (not N. Ireland) 60 m. Greater Birmingham, 3.7m,  Greater Manchester, 2.24m, Leeds 771,000.

[6] National travel survey data shows that 56% of us use a train more than once a year and that 5% of rail journeys are more than 100 miles long.  Hence if half of the latter would transfer to HS2, a very generous assumption, the proportion of the population that will use it at least once a year is (56% x 5% x 50%) = 1.4%, or one in 70.  Conversely 98.6% of us will use it less than once a year.

[7] National Travel survey data shows that those from the top quintile of household income use rail four times as much as do those from either of the bottom two quintiles.

[8] New Civil Engineer report of 24th February 2011. 


 Date 18th March 2010
Ref. hispeed17

The Times

HIGH SPEED RAIL

If railways provided the transport needed by industry the endless acres of derelict railway land that abut many rail stations and lines would contain industrial estates and business and retail parks.  Instead these land uses have gone to places where there is good road access.  The idea that high speed rail freight can reach those destinations is as bizarre as is the idea that freight needs high speed (Lord Adonis 18th March). 

 Is Lord Adonis unaware that half of us use a train less than once a year, let alone a high speed one, and that the top 20% by household income use rail five times as much as do those from the bottom 40% let alone that half of all rail journeys are less than 20 miles long?  Does he not realise that high speed may as well drain people from the dying north to the south rather than the reverse, let alone that high taxes destroy jobs?

 The economic justification of this nonsense hangs on extraordinarily high passenger forecasts and upon incremental fares.  The absurdity of including the latter is demonstrated by the fact that their value can be varied arbitrarily by altering the economic boundary of the project. 


  15th March 2011.
Ref. LTT 63 HS2 01.

Local Transport Today believed published

 The analysis for HS2 would be laughable save that Philip Hammond and others have had a vision. 

The passenger forecasts are unbelievably.  The latest provides 136,000 per day in 2043 to the north of Euston, if the scheme terminates in Birmingham, and 240,000, if the scheme were extended to Manchester and Leeds.  The 136,000 would require a 1000-seat train with a 50% load factor every six and a half minutes for 15 hours all day in each direction.  The 240,000 would require a similar train every four minutes – an incredible scenario – well on target to beat HS1’s, where the forecasts are two to three times as high as have arisen.

The DfT now appears to recognise that time on a train is not entirely wasted but goes on to claim that the case gets even stronger if (a) the time benefits are halved and (b) overcrowding is properly allowed for.  The problem is that, although the West Coast Main Line, like nearly all railways, is full to capacity at peak times, most of the time it is not.  Indeed, the average number of passengers on Virgin Trains is a magnificent 148 – enough for a couple of carriages[1]....zzzzzzz

Despite the lack of supporting evidence, Hammond is enamoured of the wider economic benefits and with the potential for regenerating the North.  Has he not realised that high taxes destroy jobs?  The core network to Birmingham, Leeds and Manchester is said to cost £32 billion.  Adding for trains and the market prices adjustor provides over £40 billion, or £700 for every man woman and child in the land.  That is equivalent to a tax hit of £2.6 billion on metropolitan Birmingham , £1.8 billion on Greater Manchester, and half a billion on Leeds, let alone the running costs.  As for regeneration, most of that will be in London at the expense of the North.  Furthermore 99% of us will use HS2 less than once a year[2], and those who do will be overwhelmingly from the better off.[3]

Hence, Hammond’s vision, instead being one of heaven, should be one of hell – a millstone round the necks of taxpayers for generations.

Stewart Joy, Chief Economist to British Railways in the 1960s wrote, in his book ‘The Train that Ran Away’ that there were those “who were prepared, cynically, to accept the rewards of high office in the British Transport Commission and the Railways in return for the unpalatable task of tricking the Government on a mammoth scale, those men”, Joy wrote, “were either fools or knaves”. 

 HS2 is the top end of that.



[1] The ORR year book provides, for Virgin Trains, 5255 million passenger-km and 35.5 million train-km. Dividing the one by the other provides an average train load of  148
[2] National travel survey data shows that 55% of us use a train more than once a year and that 5% of rail journeys are more than 100 miles long.  Hence if half of the latter would transfer to HS2, a very generous assumption, the proportion of the population that will use it at least once a year is (56% x 5% x 50%) = 1.4%, or one in 70.  Conversely 98.6% of us will use it less than once a year.
[3] National Travel survey data shows that those from the top quintile of household income use rail four times as much as do those from either of the bottom two quintiles.

 Date 29th January 2010
Ref. hispeed14

The Times

 HIGH SPEED RAIL

 Tony Lodge of the Bow Group (28th January) imagines that copying our European rivals would be sensible. Why? Is it the delight of having massive subsidies paid to a system that will be used by the rich rather than by the poor, the joy of wasting the nation’s resources on a grand scale or is it pure and simple boys-own tomfoolery?

 The full high-speed network will cost £100 billion, none of which will ever be recouped from the fare box. Instead this ego trip will cost the taxpayer around £4,000 per household, an appalling waste, bearing in mind that half of us use a train less than once a year, let alone a high speed one.

 They talk of vast benefits to the “Wider Economy” and of “Agglomeration” as though money fell out of the clouds.  Those benefits are imaginary and the economic analyses a sham.

 Have they not realised that high taxes destroy jobs? 


Date 6th April 2009
Ref. hispeed11

The Times

 HIGH SPEED RAIL

The Campaign for better transport (letter of 8th) is a railway lobby group, originally funded by the rail unions, pretending to a green agenda. However, ordinary rail uses more fuel per passenger-mile than does a diesel-powered car containing two people. Further, the proportion of emissions that can be attributed to air or rail is vanishingly small. Hence any transfer of passengers from one mode to the other would have an even more vanishingly small effect**. Nevertheless those promoting high-speed rail talk as though the carbon saving upon the transfer of passengers from air to rail may save the planet.

 


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 2006 Iain 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.



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