An internal study commissioned by the Department for Transport has found that HS2 could save up to £7bn from its costs.
The transport secretary commissioned PwC to conduct a benchmarking study in 2014, which concluded that costs could be up to 27 per cent lower for phase two of the line connecting Birmingham with cities across the North.
PwC compiled the report based on early estimates of the cost of delivering phase two. It was completed in November 2016; however, it had not been published until this week.
Overall, the report found that HS2 could save 5 per cent on finding “localised routes and scope refinements”, 4 per cent on asset costs and employing efficient construction methods, 3 per cent on reducing requirements for rolling stock, and a further 3 per cent on delivering stations at a lower cost.
The report found that, based on the early estimates, plans for phase two would cost £81m per kilometre – two-and-a-half times more than the average of £32m for 20 similar high-speed projects in Europe.
PwC also said the delivery of phase two’s new stations would cost more than those in the comparative European schemes, while citing HS2’s decision to take new lines into city centres rather than using existing routes, as is preferred in Europe.
The report said: “The business case also requires intermediate stations to be provided at East Midlands (Toton), Sheffield and Manchester Airport.
“These intermediate station locations are also favoured by many local stakeholders and increase public support for HS2.
“These requirements drive costs higher when compared with overseas comparators that use existing conventional railways to enter city centres.
“The locations of intermediate stations constrain the route alignment, which means less flexibility to avoid challenging topography and areas of high-value land and property. They also have a higher level of complexity and a greater number of platforms when compared to comparators.
“Overall they drive a cost difference of 15 per cent when compared to Comparator F [a benchmark scheme on continental Europe].”
Asked by CN whether actions were taken as a result of the PwC report, an HS2 spokesperson said: “We are taking on board the lessons we’ve learned from other countries’ experience of building high-speed rail, working with the industry to innovate in delivering the UK’s new railway.
“There are factors that make building a new railway in the UK uniquely challenging, including land values, population densities, environmental mitigation, and a developing high-speed rail supply industry.
“To help the rebalancing of the UK economy, HS2 will deliver city centre-to-city centre services between places such as Birmingham, London, Leeds and Manchester – allowing passengers to link easily with local and regional services.
“To achieve this means overcoming challenges not experienced during other countries’ high-speed rail developments.”
Earlier this month HS2 had to reject claims that transport secretary Chris Grayling had told rail experts that parts of the second phase may not get built.
According to the Sunday Telegraph, Mr Grayling was quoted as telling a rail conference in London in October that HS2’s second phase was “not in the bag” and could be scaled back.
The Telegraph reported the transport secretary as saying: “It [HS2] will be a fantastic railway, one of the best in Europe – but it still needs support if it is to definitely go to Leeds.”
HS2 dismissed the claims as “nonsense”, while the Department for Transport said in a statement that the claims were “completely and utterly untrue”.