Treasury fears HS2 could cost £73bn
A REPORT in the Financial Times newspaper suggests Treasury officials are privately warning that the HS2 high-speed rail project could cost £73bn rather than the £42.6bn currently estimated.
Officials have included the effects of inflation and VAT over the project’s 20-year lifespan to arrive at a £73bn figure.
It is the second time in a week that the £42bn cost figure for the 225mph rail project has been brought into question.
Free market think tank the Institute of Economic Affairs (IEA) claimed that costs would soar to £80bn.
However, Jerry Blackett, chief executive of Birmingham Chamber of Commerce Group, dismissed that report as short-sighted and based on “wild guesses”.
The £42bn figure doesn’t include rolling stock, however. New trains will take the bill up to £50bn.
Construction work on phase one of the HS2 project – linking Birmingham and London – is due to start in 2016 and be complete in 2026. HS2 rail links to Leeds and Manchester are due to be up and running in 2032.
The Financial Times says there is is a widely held view in the Treasury’s senior echelons that the scheme will drain investment from other projects.
It suggests that while Treasury officials are working to deliver the scheme, many privately believe an incoming Labour government would be forced to look again at the merits of Britain’s biggest infrastructure project.
