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U.K. High Speed Rail Chief Argues for Early Northern Link

March 17 (Bloomberg) -- Britain’s planned High Speed 2 rail line should serve northern England earlier than envisaged and feature a super-station in London to maximize returns on its 50 billion-pound ($83 billion) cost, the project’s chief said.

The route could be extended 43 miles within a year of its southern section opening, providing a hub for onward travel to northern cities, while Euston station should become a focus for regeneration, HS2 Ltd. Chairman David Higgins said in a report.

U.K. Transport Secretary Patrick McLoughlin said he’ll seek more detail on the proposals and implement a recommendation for the scrapping of a link between HS2 and the High Speed 1 Channel Tunnel line. Prime Minister David Cameron has struggled to win support from his own Conservative Party for the HS2 route, which would traverse affluent rural constituencies without providing stations there, while the House of Commons Treasury Committee said in October that the economic case hadn’t been proven.

“If done right, HS2 can provide an answer that does stand the test of time and addresses the issues of congestion in the south and lack of connectivity in the north,” Higgins said. “The cost and impact have to be recognized and acknowledged, but so too do the cost and impact of doing nothing.”

Contingency Retained

HS2 will not only shorten rail journeys and boost capacity but also help ease property prices in London by encouraging businesses to locate in the north, according to Higgins, who was previously chief executive officer of Network Rail Ltd. and before that oversaw infrastructure work for the 2012 Olympics.

An “exhaustive review” has show that allocated costs of 21.4 billion pounds for infrastructure and 3 billion pounds for trains should be sufficient to deliver HS2’s phase-one route from London to Birmingham, though legislative uncertainty and the risk inherent in the early stages of a project mean it’s too soon to reduce the contingency sum included, Higgins said.

The report also rejects the achievement of savings via cutbacks to mitigation measures or a property compensation plan.

“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.”

Northern Interchange

The opposition Labour Party’s Treasury spokesman Ed Balls told the BBC’s “Andrew Marr Show” yesterday that there’ll be “no blank check” for HS2. Still, Labour will support a bill when it is brought to Parliament “because of the capacity constraints too many commuters on our railways face,” its transport spokeswoman, Mary Creagh, said today in a statement.

HS2, featuring trains capable of 225 miles an hour running on 335 miles of dedicated track, would be built in two stages starting in 2017, initially serving Birmingham, central England, and splitting to reach Manchester, Sheffield and Leeds.

Acceleration of phase-two work could allow the line to tap the northern rail interchange of Crewe in 2027, a year after the Birmingham leg is due to open and six years prior to the current target, Higgins said, with the whole HS2 project potentially completed in 2030, three years earlier than formerly envisaged.

Euston station should be developed on the same scale as the HS1 Channel Tunnel rail route’s St Pancras terminus, providing a facility capable of reviving the surrounding area, Higgins said.

‘Imperfect’

While HS2 has previously considered both a multiple-deck Euston, with platforms on different levels, and an option for high-speed lines to be built adjoining existing tracks, today’s study envisages a street-level deck permitting access from one side of the terminus to the other. That would bind the station directly to the local community and maximize the area available for “over-site” housing, retail and commercial development.

A link from HS2 to HS1 costing about 700 million pounds is “an imperfect compromise” that would disrupt local trains and use up capacity, he said, recommending that with a transfer between the two lines entailing only a one-stop ride on the London subway, the plan “should be reconsidered.”

McLoughlin said today that he’ll take steps to remove the link from legislation while commissioning a study into ways of improving connections to continental Europe that could be implemented “once the initial stages of HS2 are complete.”

Euston’s redevelopment would provide an opportunity for private-sector investment in the project to reduce the state’s share of spending, McLoughlin said, adding that proposals should include the restoration of the Euston Arch erected in 1837 and demolished when the station was rebuilt in the 1960s.

The Confederation of British Industry said today’s report will “build confidence in the budget, delivery and benefits of HS2” and called for the project to quickly move to the construction stage. KPMG LLP said Higgins had refused to cut the project’s cost “by even a penny,” instead challenging the government and country to “embrace an even bigger vision.”

To contact the reporters on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net; Christopher Jasper in London at cjasper@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Craig Stirling at cstirling1@bloomberg.net Eddie Buckle, John Simpson

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