High-speed IT may outstrip need for high-speed rail

Tuesday, 10th January 2012, 7:18pm

We’ve trundled along this territory before, but given the latest news that the £32 billion high-speed rail route has received the green light, expect everyone to flag their favourite talking points again. From the Centre for Economics and Business Research (CEBR) today comes a note arguing against HS2: ‘If the project goes ahead it will be a triumph for spin and vested interests over economic good sense.’

The main economic case for HS2 is dependent on business time savings, says CEBR. But trains are becoming more like mobile offices anyway, so people can actually work while commuting. ‘Modern rail, with the ability to plug in computers and increasing wifi and mobile connectivity, is much more like a substitute office than the rail of the time when the official estimates were made.’

Indeed, by the mid-2030s when HS2 comes in, high-tech teleconferencing will negate the need for much of business travel, says CEBR. ‘If you have never seen telepresence, have a look at it before you think HS2 is necessary.’

Most importantly, says CEBR, the idea that the alternatives to HS2 won’t provide enough capacity is based on OBR economic forecasts given before the Autumn Statement last year, which are outdated. Looking instead at realistic economic and rail demand forecasts, ‘that claim is complete nonsense’. On realistic growth projections, ‘most of the economic case disappears and the financial deficit from the business case gets much larger.’

CEBR puts the benefit-cost ratio of HS2 at only 0.5, against the official and ‘implausible’ 2.0. The financial deficit, which will require a government subsidy, is likely to be £18 billion rather than the official claim of £14 billion. ‘This seems a major waste of money when spending is being cut and taxes raised,’ CEBR concludes.

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mad tony

January 13th, 2012 8:27pm Report this comment

Now if an appropriate set of cables such as fibre-optics etc could be laid along the route for superfast internet and other fixed line telecommuications then it might get some money back. My big concern is that it becomes a white elephant (like that line from St Pancras to Stratford - at least off-peak it is.

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