In 2007 the High Speed 1 (HS1) rail project, better known as the Channel Tunnel Rail Link, was completed. It came in on time and under budget, a shining exception for major construction works in the UK. It was the country’s first high-speed train, running 68.5 miles from London to Dover and cutting the time between London and Paris by 35 minutes with a much smoother ride. This was a triumphant entry into Europe.
The cost of this tremendous project was £5.8bn, working out at just £84mn per mile.
The High Speed 2 (HS2) rail project is stalled somewhere between London and Birmingham and links to the North have been cancelled while other elements of the plan are in question. It is of course a much bigger project but in 2020 the estimates for the 345 miles of track had already risen as high as £106bn and the cost per mile to £307mn – nearly four times as much as HS1. The London to Birmingham estimates alone this year are £44.6bn for 130 miles of track, i.e., £343mn per mile or five times higher than HS1.
Another kick in the teeth for the British public: the cost of the HS2 Phase 2 cancellation is estimated to be over £2bn. Additionally, the National Audit Office reported that the process to close down Phase 2 will cost up to £100mn.
Warnings and red flags were dismissed
This record is catastrophic, a national disgrace. Yet red flags were clearly visible all over the project. And all were ignored by an irresponsible government.
First of all, in 2010, just three years after HS1 was completed the HS2 budget was set at £30bn. Two years later, surprisingly, the chair of the successful HS1, Rob Holden, was critical of the project as being ‘engineering-led’ rather than needs-led. Another five years on and the projected cost was up to £56bn. An alarming report in 2015 by the House of Lords economic affairs committee found “it is impossible to agree with the government that HS2 is the only solution to increase capacity on the rail network”.
Finally in 2017, despite a warning from the National Audit Office that HS2 would likely be over-budget and late, it received royal assent and work began.
Just one year later, in 2018, the estimate had soared to £81–88bn, nearly three times the original budget in 2010. Jump to today, and we are told there will likely be an express railway that is just one third of the original design, at a cost of £45bn, which is additional 50% greater than the original forecast. All that money, with the associated environmental destruction and compulsory purchase of individuals’ property – to save 30 minutes travelling from London to Birmingham. That works out at £1.5bn for every minute saved. Where else has money been wasted at such a rate? Not even the PPE stitch-up!
It is a disaster of such epic proportions it could be seen as a peacetime equivalent of Churchill’s tragically misplaced invasion of the Turkish Dardanelles in 1915, for which he was impelled to resign as First Lord of the Admiralty. Not much chance of any such casualties in this Conservative cabinet.
UK’s failure to learn from earlier success
The HS2 debacle is the result of a real need being managed as a vanity project. It is down to the hubris of politicians with no idea of how railways are built, who took no account of previous experience and expert opinion, and who, when it became clear that the costs were unsupportable, still pressed on, stiff-necked and unapologetic.
Here’s where I confess an interest. My company in Sheffield was the contractor partnering consultant working with John Prideaux, the first head of Union Railways, which was set up by British Rail to deliver HS1. (John, like Rob Holden, was a real leader, and in his role as MD of InterCity, built the finest board of directors I have come across in my 30 years consulting. John became a good friend, as did the head of procurement, David Avery.)
A curious twist of fate was that the main beneficiary of that seminal lesson of HS1 – cooperation in the supply chain – was not a UK company, but Hong Kong’s Mass Transit Rail Company (MTRC). When it planned its Tseung Kwan O underground rail extension (TKE) into the New Territories, the top management made the decision that it would be a cooperative venture with the contractors. I was engaged to work in Hong Kong with David Avery and this was the strategy used to help embed partnering across the whole system.
The result was the most successful project of any kind in the world. It came in four months early, in August of 2002, and 59% under the first budget of HK$30.5bn.
Real leadership in action
In Hong Kong the groundwork for success had already been laid by the corporation. The leaders of this public/private railway project had cleared the way, starting with a policy of no design changes, which also applied to IT.
The design team worked in the corporate offices with the project management team and built a great rapport. The head office team took responsibility for anticipating problems with permits, government approval, and on-time payments at completion dates. They were also engaging local people in the project, taking them round the proposed station sites and explaining the green policies incorporated into the design.
This was real planning, not a wish list or empty rhetoric but leadership in action.
They also had the good sense to realise that, although cooperative policies were working very well inside the corporation, they might not have the know-how to extend this to the contractors. So at that stage my company in Sheffield became involved in planning and delivering the engagement strategy, working with two very bright young managers, Henry Lam and Roger Bayliss, who had taken it upon themselves to research partnering and were prime movers in its application, with David Avery.
The outcome of this Hong Kong project was that in 2019, pre-pandemic, the completed MTRC was fully operative, serving 5.8 million passengers a day with a reliability record of 99.9%, and also making a profit. What a success – and what a contrast with the mismanaged private railway system that the UK has today, let alone the epic muddle that is HS2.
A final point. The pipeline of South Yorkshire Mayoral Combined Authority projects in my city of Sheffield means the city has a great opportunity to copy the MTRC model and achieve on-time, below budget outcomes, delighting both the public and its treasury management officers.
