Government Gives Go-Ahead for High-Speed Rail Link From London to North

The U.K. government approved a plan to build a high-speed rail link from London to Birmingham and on to northern England, making some changes to the route to meet objections from lawmakers who oppose the proposal.

Transport Secretary Justine Greening made the announcement in a statement today, saying the London-Birmingham route will open in 2026 with lines to Manchester and Leeds in 2032-33. The cost of building the line will rise to 32.7 billion pounds ($50.6 billion) from 32.2 billion pounds and the government is seeking private-sector and European Union funding to help meet the bill, she told lawmakers in the House of Commons.

There will be additional tunnels to overcome objections from people living along the line to Birmingham and more than half of the route will be in tunnels or cuttings, Greening said. The changes include a longer tunnel through the Chiltern hills, designated an area of natural beauty, and a new tunnel to reduce the impact on people living in Ruislip, northwest London.

“I have decided Britain should embark upon the most significant transport infrastructure project since the building of the motorways,” Greening said. “By following in the footsteps of the 19th-century railway pioneers, the government is signaling its commitment to providing 21st-century infrastructure and connections -- laying the groundwork for long-term, sustainable economic growth.”

‘Less Spoil’

The Chilterns tunnel will save between 250 and 300 million pounds on previous estimates because of the reduced cost of removing soil from the site, Greening said.

“The engineering solutions we’ve found will need less use of deep cutting, so less spoil, and it’s the removal of that spoil that causes great expense,” Greening told lawmakers. Tunneling under the whole of the Chilterns would add 1.2 billion to the cost of the project, so “that’s why we’re not doing that,” she said.

Prime Minister David Cameron’s coalition government says the high-speed line will boost the capacity of the U.K.’s rail network, slash journey times and ease overcrowding on existing lines, as well as allow northern cities better access to London’s economy.

The West Coast main line from London to northwest England and Scotland is the busiest mixed-use rail route in Europe and will be operating at maximum capacity by 2024 if no action is taken, according to Network Rail.

‘North-South Divide’

“The point of this scheme is that for every pound spent, it creates 2 pounds of benefit,” Cameron’s spokesman Steve Field told reporters in London today. “It’s vital to our efforts to rebalance the economy and tackle the problem of the north-south divide.”

The plan has been criticized by lawmakers in Cameron’s own Conservative Party along with action groups, such as Stop HS2 and The Countryside Alliance, who oppose the construction of the line through rural areas. Groups opposing the route also say that the government is overstating the economic benefits of the project.

“There’s no business case, there’s no environmental case and there’s no money to pay for it,” Joe Rukin from Stop HS2 said in a telephone interview. “You could bring more benefits to more people more quickly by investing in the existing rail industry.”

Time Savings

The government estimates that the route will generate economic benefits of 47 billion pounds and fare revenues of as much as 34 billion pounds over 60 years. The line will cut journey times to Birmingham to 49 minutes from about 84 minutes and to Manchester to 80 minutes from about 127 minutes. There will also be a link to London’s Heathrow Airport by 2033.

Welsh Secretary Cheryl Gillan has previously said she will resign her Cabinet post if necessary to vote in Parliament against the line, which will go through her Buckinghamshire district.

The minister for Europe, David Lidington, who represents a neighboring constituency, also opposes the plans and London Mayor Boris Johnson, a Conservative, dropped his original support for the line over plans for the route through the capital.

Opponents of the project said there will be protests against the line, including possible court action against the government.

‘Legal Challenge’

“We are not at all happy with the way that this has been consulted upon and generally handled. I’m certain that the people that live along the line are going to fight tooth-and- nail to stop this happening,” Dylan Sharpe, spokesman for the Countryside Alliance, said in an e-mailed statement. “I wouldn’t be surprised if by the end of the week news of a legal challenge has come out.”

Business leaders welcomed the announcement as a spur to growth by increasing capacity for freight on routes to the north of England, as well as improving links to existing transport networks including Ferrovial SA (FER)’s Heathrow and the HS1 high- speed rail line through the Channel Tunnel to France and Belgium.

“It is good news that the government has decided to go ahead with HS2 and we are pleased that proposals we supported regarding the direct links to HS1 and Heathrow have been taken on board,” Colin Stanbridge, chief executive officer of the London Chamber of Commerce and Industry, said in an e-mailed statement. “HS2 will increase capacity on the rail network and, once phase two is complete, will open up Europe to the north of the U.K., benefiting businesses both in London and across the country.”

Eurostar Services

HS1, the U.K.’s first high-speed rail line, was completed in 2007. The route is used principally by Eurostar Group Ltd, which runs services from London St. Pancras station to Paris and Brussels. In November 2010, the government agreed to sell a 30- year contract to run the route to a group led by Canadian investment funds for 2.1 billion pounds.

No construction contracts for the new line will be awarded before the next election in 2015, Greening told lawmakers. She said all of the government figures have been adjusted upward to take account of “optimism bias” in the estimates.

“It’s going to be political will above all else that it needs” for the project to be completed, Greening said. “We can’t afford not to do this.”

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Steve Rothwell in London at srothwell@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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