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January 28, 2013 4:11 pm
The government’s attempt to drive a new rail line through a bunch of safe Conservative seats is only entertaining for those living on the sidelines. On Monday it added a new list of potential Nimbys by unveiling the second stage of the route, which will run from Birmingham to Leeds and Manchester. But even once the opponents have been persuaded (forcibly or otherwise), the government will have to start raising private sector finance to part fund the £34bn project.
As the 150-year-old London Underground demonstrates, private sector involvement can work well in the early stages of a rail project. But recent experience in the industry is not good. Railtrack’s assets were nationalised in 2002. Metronet and Tube Lines, private companies set up to maintain the tube, both failed (the former was dissolved, the latter is now in the public sector).
And if that is not enough, there is a history of underestimating costs on big rail projects. An upgrade to the West Coast Main Line was supposed to cost £2bn but the final bill came in at close to £9bn. And just last month the planners behind a rail project in Germany said that the costs had gone up by 20 per cent to €5.5bn. At least Crossrail, a new cross-London line, is running slightly below early estimates of £16-17bn.
Add all that to the long timeframe – the second part of the line will not be finished until 2033 – and there is a whole carriage full of reasons why investors might run a mile from HS2. Other infrastructure projects are already struggling to win backers. To pull in the money, the government will have to be more forthcoming with detail than it has been so far, give the same sort of guarantees that it is offering on other early stage infrastructure projects, and come up with a firmer timescale on when things might start moving. Best start talking to some of those Nimbys.
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