Bloomberg News

U.K. High-Speed Rail Link Wasn’t Value for Money, Watchdog Says

March 27, 2012

A Eurostar train. Photographer: Philippe Huguen/AFP/Getty Images

A Eurostar train. Photographer: Philippe Huguen/AFP/Getty Images

Britain’s first high-speed rail link, running from London to the Channel Tunnel, has failed to provide value for money for taxpayers, the government’s spending watchdog said.

Net costs to the taxpayer from the line, known as HS1, will total 10.2 billion pounds ($16.3 billion) by 2070, the National Audit Office in London said in a report published today. Savings on journey times will produce a benefit of 7 billion pounds over the same period, the NAO said.

“On these measures we would conclude that the project is not value for money,” the watchdog said. While other benefits haven’t been quantified and some can’t be measured, the Department for Transport “would need to demonstrate that these benefits are going to be at least 8.3 billion pounds, giving a higher contribution than originally expected, to achieve the benefit-cost ratio of 1.5 to 1 estimated in 1998.”

The first high-speed line was completed in 2007 at a cost of 6.2 billion pounds. It carries trains including the Eurostar Group Ltd. link from London to Paris and Brussels and commuter trains between London and Kent, with 18.1 million passengers last year. The concession to run the line was sold to a group led by Canadian investment funds for 2 billion pounds in 2010.

The government approved a plan in January to build a high- speed rail link from London to Birmingham, opening in 2026, and on to Manchester and Leeds in 2032-33. It’s seeking private- sector and European Union funding to help meet the 32.7 billion- pound cost. Ministers say the line will boost the capacity of the rail network, slash journey times and ease overcrowding on existing routes, as well as allow northern cities better access to the capital.

To contact the reporter on this story: Eddie Buckle in London at ebuckle@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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