Johnson Backs HS2 U.K. Rail Plan Amid Rising Costs and Tory Rage

LONDON (Capital Markets in Africa) – U.K. Prime Minister Boris Johnson committed tens of billions of pounds for a controversial new high-speed rail line linking London with cities to the north, despite soaring costs and mounting anger from his own Conservative Party colleagues.

The High Speed 2 (HS2) development will become Europe’s largest infrastructure project but it has suffered delays and criticism of its management, with spiraling costs estimated to rise potentially to more than 100 billion pounds ($129billion). The first trains may not start running until 2031.

Johnson believes the new line stretching from the capital to Birmingham and then on to Manchester and Leeds is vital to revive the economy in “left behind” communities that backed Brexit and voted Conservative in last December’s election.

“Our generation faces a historic choice,” Johnson said as he announced his decision in Parliament on Tuesday. “We can consign the next generation to overcrowding, standing up in the carriageways, or we can have the guts to take a decision, no matter how difficult and controversial, that will deliver prosperity to every part of the country.”

The project is highly sensitive politically for Johnson’s government. Backers of the plan say it will cut journey times, increase capacity, create jobs and help link northern and central parts of England to the wealthier south. Boosting the country’s former industrial heartlands is Johnson’s key political mission now that the U.K. has left the EU.

First-Time Tories
He won a majority in Parliament largely thanks to persuading voters in these areas to back him, with some traditionally Labour-supporting districts electing Conservatives for the first time. But many Tory members of Parliament oppose HS2 because the line will cut through their districts, causing severe disruption for thousands of constituents. The project managers at HS2 Ltd have been attacked for delays and for failing to keep costs down.

“HS2 is unloved, unwanted and has been grossly mismanaged,” Conservative MP Andrew Bridgen told Johnson. “This could well be an albatross around this government and the country’s neck moving forward.” Other senior Tories including Graham Brady and former cabinet minister Jeremy Wright also spoke against the project.

Johnson said the government commissioned a review of HS2, which concluded the case for going ahead was clear, despite the problems so far. He promised to reassess the costs and will appoint a government minister with the full-time job of overseeing the project.

“This country is being held back by our inadequate infrastructure,” Johnson said. “Efficient transport can clean the air and cut pollution and get cars off the road,” he told the Commons. “We can shorten your commute and give you more time with your family and increase productivity — and bring business and investment to left-behind communities.”

HS2 trains will reach speeds of 225 miles (362 kilometers) per hour, faster than most other high-speed lines in the world. On the High Speed 1 Channel Tunnel line, Eurostar trains to and from continental Europe reach 186 mph, while domestic services attain 140 mph. HS2 will also triple north-south rail capacity, with as many as 14 trains an hour using the line.

Construction Boom
The biggest HS2 contracts are for the construction of the line and its stations, with at least 11.5 billion pounds of work handed out across 27 tenders as of August.

“The decision to go ahead with HS2 is good news for the economy in general and is an immediate fillip to the construction sector,” the Unite labor union said in a statement ahead of the government’s announcement.

Balfour Beatty Plc, Britain’s biggest civil engineer, leads the way, holding contracts with Vinci SA of France to design and build bridges, tunnels, embankments and viaducts for the northern half of the first phase of the line, valued at about 2.5 billion pounds.

The same two companies, together with Paris-based SYSTRA SA, have been engaged to build a 1 billion-pound hub interchange between HS2, the London subway and the main line to southwest England at Old Oak Common, London.

Source: Bloomberg Business News