U.K. Should Speed Up High-Speed-Rail Project: Higgins

The U.K. must focus on cutting delays in its high-speed-rail project and speed up some of the line’s stages to keep costs and uncertainty down, according to a report by HS2 Ltd. chairman David Higgins.

“Put simply, the shorter the timescale, and the more certainty about the timescale, the lower the costs will be,” Higgins said in the report, published today. “Less inflation is imported into the project, and contractors can achieve greater economies of scale because they can plan ahead.”

The report was commissioned by Prime Minister David Cameron to examine ways to keep costs of the 50 billion-pound ($83 billion) project down amid mounting opposition. The opposition Labour Party has suggested it may scrap the project if elected in 2015 and if costs prove excessive. Residents and businesses in affected areas challenged HS2 on environmental grounds in a case appealed to and rejected by the High Court.

Labour will support the bill when it is brought to parliament “because of the capacity constraints too many commuters on our railways face,” the party’s transport spokeswoman, Mary Creagh, said in a statement.

The proposed 335 miles (540 kilometers) of track will run from London to Birmingham, central England, and then split to link in Manchester, Sheffield and Leeds. HS2 trains would reach speeds as high as 225 miles an hour. The first phase, to the West Midlands, is scheduled to be completed in 2026, with a second phase planned to Leeds and Manchester, and eventually to Scotland. Construction is due to start in 2017.

‘Extra Uncertainty’

“Additional time spent debating the legislation will translate into extra uncertainty about the construction timescale –- and therefore about its cost,” Higgins said in the report.

The report also says plans for a link at Crewe, in northern England, should be brought forward by six years to 2027. Higgins also questioned current plans to link the HS2 line to an existing high-speed line that runs through Kent, and suggested a more ambitious project to redevelop Euston station in London may be needed.

Higgins didn’t suggest cutting the 21.4 billion-pound cost and the 3 billion pounds allocated for trains for the first phase of the project owing to “the uncertainty over the legislative timetable plus the inherent risks associated with any project at this early stage.” He suggested taking the same approach for the second phase and said the project could be delivered within that budget.

Labour’s Treasury spokesman Ed Balls told the “Andrew Marr Show” yesterday that “there’s no blank check” from Labour for HS2.

“The costs have got to come down, the assumptions have got to be robust,” he said. “If this is not a value-for-money project, it shouldn’t be supported”

Business Secretary Vince Cable told the Observer newspaper yesterday HS2 could help rebalance the economy between London and northern cities.

The report also rejected any cutbacks to planned mitigation measures and to the government’s planned property compensation plan.

To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

To contact the editors responsible for this story: Andrea Snyder at asnyder5@bloomberg.net John Simpson

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