It’s official: PM scraps the northern part of HS2 

HS2, Rishi Sunak, UK,

October 9, 2023

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UK’s Prime Minister Rishi Sunak has officially cancelled the HS2 northern leg citing cost overruns and mismanagement.

In a not-so-surprising turn of events, UK Prime Minister Rishi Sunak has announced the cancellation of the long-anticipated northern leg of the high-speed rail network, HS2. This ambitious project was initially designed to connect the capital, London, to the northern city of Manchester, covering a staggering distance of 530 kilometers (330 miles).

Sunak’s announcement came during his closing speech at the Conservative Party conference in Manchester and sent shockwaves throughout the country.

Doubling Costs and Criticism of HS2

The decision to scrap the northern leg of HS2 was primarily attributed to the project’s escalating costs. The budget for HS2 had doubled over time, leading to concerns about its financial feasibility. The project was initially estimated to cost approximately £56 billion (around $76 billion).

However, over the years, these estimates have ballooned, with some projections exceeding £100 billion (over $136 billion). Such a substantial increase in costs has triggered concerns about the project’s affordability and raised doubts about whether it can deliver value for money.

One of the primary factors behind the escalating costs is the complexity of constructing a high-speed rail network that traverses diverse landscapes and regions. The construction process involves tunnelling through challenging terrains, bridging rivers, and navigating densely populated urban areas.

Acquiring land for the project, compensating affected property owners, and addressing environmental concerns have also contributed significantly to the cost escalation.

HS2 has faced legal and political challenges from both activists and local communities which have resulted in delays and added legal costs to the project.

Introducing “Network North”

To mitigate the impact of cancelling the HS2 northern leg, Sunak introduced a new initiative known as “Network North.” Under this plan, the government will inject a substantial £43.6 billion (approximately $59.5 billion) into existing transport systems, encompassing roads, railways, and buses.

According to Sunak, reallocating the funds from the cancelled HS2 segment will enable the government to invest in “hundreds of new transport projects in the north and the Midlands and across the country.” The core objective of “Network North” is to provide improved transportation connections in the northern regions more quickly than HS2 would have accomplished.

£19.8 billion will be reinvested in the North, including:  

• £2 billion for a new station at Bradford and a new connection to Manchester;  
• £2.5 billion to deliver a new mass transit system in West Yorkshire;  
• £3 billion for upgraded and electrified lines between Manchester and Sheffield, Sheffield and Leeds, Sheffield and Hull, and Hull-Leeds.  
• Nearly £4 billion more funding for local transport in the North’s six city regions. 
• A new £2.5 billion fund for local transport across all areas in the North outside the six city regions – smaller cities, counties, towns and countryside.  
• A new £3.3 billion fund for road resurfacing.  
• Landmark investments in roads, reopened train lines and new stations; 

A further £12 billion will be invested to better connect Manchester to Liverpool. This would allow the delivery of Northern Powerhouse Rail as previously planned, including high-speed lines.

£9.6 billion will be reinvested in the Midlands: 

• Funding the Midlands Rail Hub in full with £1.75 billion, connecting 50 stations and over 7 million people – doubling capacity and frequency;  
• Over £1.5 billion guaranteed local transport funding for the new East Midlands Mayor;  
• Over £1 billion extra local transport funding for West Midlands City Region; 
• A new £2.2 billion fund for local transport across all areas in the West and East Midlands outside the city regions – smaller cities, counties, towns and countryside. 
• Reopened train lines and new stations such as the Ivanhoe Line;  
• The development of Midlands road schemes to benefit businesses and their employees at Rolls Royce, Toyota, and Magna Park, generating over £12 billion for the local economy.  

£6.5 billion for the rest of the country: 

• Rail improvements in the Southwest;  
• Keeping the £2 bus fare until the end of December 2024;  
• Ensuring the delivery of road schemes;  
• Transforming Ely Junction; and billions to fix potholes on the country’s roads;  
• Greater connectivity for both Scotland and Wales with improvements to the A75 between Gretna and Stranraer, and £1 billion to fund the electrification of the North Wales Main Line.   

Industry’s Response to HS2’s cancellation

The industry’s response to UK Prime Minister Rishi Sunak’s decision to cancel the northern part of HS2, has been mixed, with a range of opinions and perspectives.

Many construction companies and contractors involved in HS2 have expressed disappointment and concern about the cancellation raising concerns about potential job losses within the construction sector, particularly in regions that were counting on HS2-related employment opportunities.

Transportation experts and advocates had varying opinions on the decision. Some saw it as a setback for improving transportation connectivity in the north of England, while others believed the funds could be used more effectively on other transport projects.

The decision to cancel HS2’s northern leg was met with mixed reactions from politicians. Members of the Conservative Party, including some in the northern constituencies, expressed concerns and disappointment. Meanwhile, the opposition Labour Party criticized the cancellation, as they had initiated the HS2 project during their time in government.

In response to Sunak’s announcement, Chris Richards, the Director of Policy at the Institution of Civil Engineers (ICE), emphasized the importance of a more coherent and long-term approach to infrastructure planning. Richards highlighted the need for consistent, evidence-based, and long-term thinking on financing options, as well as robust policy support to achieve desired outcomes.

Richards noted that the UK must break free from the cycle of stop-and-start decision-making, which often drives up project costs and leads to delays. He stressed that the focus should be on the positive outcomes that infrastructure investments bring to businesses and communities, rather than solely on the lowest cost of delivery.

A statement from the High Speed Rail Group reads: “Today’s news is a devastating blow to our industry and our whole economy. For 15 years, we have worked with the government to develop this project – their project – taking it from a concept to construction. Companies have invested in people, skills and equipment on the back of it, with some even relocating in anticipation of it being completed.

“It is true that the costs of the project have risen over those 15 years. In recent years, inflation has been rampant in the UK economy, and the construction sector has been impacted far more than most. But the principal cause of any real term cost increases lies in the chopping and changing of the project’s scope, with today’s news being the fourth major change by government in just three years. As any project manager will tell you, the cheapest way to deliver is against a fixed scope without constant changes. This is the biggest and most damaging U-turn in the history of UK infrastructure.

“What we have now is a plan for a railway that will not deliver the transformational benefits that the north of England needs. Indeed, the solution proposed by the Prime Minister is a recipe for disaster. Merging HS2 trains onto existing lines at Birmingham will create a huge bottleneck, akin to the M40 merging onto an A-road and then a country lane – rather than the M6. Rail connectivity to the north will be worse than it is today.

“That’s why it is inconceivable that HS2 will not eventually reach Manchester. Today, the industry recommits to delivering the first phase as efficiently as it can, whilst continuing to make the case that this should be just the beginning of a network that reaches Manchester, Leeds and many more cities. We stand ready to work on those future developments.

“The proposed investment through ‘Network North’ is an interesting one and, of course, welcome. But cancelling Phase 2 of HS2 frees up just £1 billion to £3 billion in the next five years, meaning any improvements are still far over the horizon.

“If we want to truly level up our country, it cannot be a choice between HS2 and other projects. The UK needs 21st century infrastructure, bringing all of its cities closer together. HS2 is the key foundation for that network. Every other major European country has managed to build a high-speed rail network, recognising that it’s a vital part of a modern society and economy for years to come. We’d like to think Britain still could, too.”

Source: Press release, UK Government

Source: High Speed Rail Group

Source: ICE press release

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