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Hidden cost "bombshell" of high-speed rail...

By William Green on Jan 24, 11 02:00 PM

£33bn. That's the estimated cost of the high-speed rail link backed by the coalition. Already a pretty tidy sum.

Transport Secretary Philip Hammond has said it will transform the "economic and social geography" of Britain.

The first leg, to be built after 2015, will run from London to Birmingham. The second stage will go onto Manchester, with more vague plans about heading onto Scotland.

But buried in a Government report is a serious warning about a hidden financial cost - of high-speed rail. Make no mistake, this is a serious business and some might say it could be a "bombshell" bill. And there will be major disruption at one of Britain's busiest stations.

It all relates to the West Coast Main Line franchise. The route was upgraded for a whopping £9bn. Passenger numbers have risen with raising amounts of revenue from the line.

Under rail franchising, the Government either pays a subsidy to run services or collects a premium. With improving services, the belief must have been that the West Coast route would be something a cash cow in future.

But that could thrown into chaos by... the high-speed rail line. And the Department for Transport has admitted as much in its plans to find a new private operator from the route, currently out to consultation.

It talks about the high-speed line being "abstractive" - in other words taking money from the West Coast franchise. And it will be difficult for firms to put a price on their bids as a result, hence the possibility of a hidden cost bombshell.

"Subject to the outcome of the consultation it is likely that the first phase of High Speed 2 would fundamentally alter the nature of the InterCity West Coast franchise once operational.

"It would substantially abstract from the existing InterCity West Coast franchise and necessitate significant changes to track access rights and through train connections with the north of England and Scotland.

"Additionally, it is likely that major construction work will be needed at Euston station to enable the new high speed rail lines to be incorporated into the revamped station building.

"The phasing of any such works will only be decided after the consultation, but the new franchisee would need to be prepared for the possibility of some disruption to both services and the station concourse interchange during the next franchise.

"The new franchisee will therefore be required to work closely with HS2 Ltd and Network Rail during the planning, construction and commissioning of any new railway.

"Bidders may find it difficult to price within their proposals either the inclusion of or abstractive effect of the introduction of high speed services at this stage."

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