This piece originally ran on The Transport Politic.
Whatever the recession’s effects on government budgets, infrastructure development in Europe continues to advance at a steady pace. The United Kingdom government affirmed last week that it would move forward with the construction of a £18.8 billion ($29 billion) high-speed link between London and Birmingham, due for opening in 2026. This in spite of draconian cuts across all sorts of public services, both in Britain and across the continent.
The U.K.’s high-speed effort — it will effectively produce the nation’s first domestic truly high-speed line — follows almost two decades of travel to and from Paris and Brussels via Eurostar trains that operate under the English Chanel. Though those services have only recently met opening-year ridership expectations, Eurostar holds the large majority of the air-rail market share to these continental capitals, especially since, following improvements completed in 2007, London finds itself within about two hours of its mainland peers. The popularity of that service surely had something to do with the government’s decision to move forward on a second line.
HS2 will bring measurable benefits: London to Birmingham in just 45 minutes, compared to 1h20 today, and eventually an hour off of trips to Manchester or Leeds, once extensions north to those cities are opened in 2032 at a cumulative cost of £36 billion. Direct trips between northern cities, Heathrow Airport and even the European continent will be put into place via the Channel Tunnel Rail Link. London’s aging Euston terminal will be significantly spruced up. The biggest improvement, perhaps, will be the practical doubling of capacity between the capital and the Midlands by providing a release valve for the West Coast Main Line, which recently went through its own upgrading project but which is predicted to reach capacity with a dozen years. (It already handles more than 40 percent of the country’s freight and 75 million annual passenger journeys.)
Yet the enormous cost of the link up to Birmingham has been put in question repeatedly not only by those who worry about increasing public debt but also those who question the need for the new rail link — especially along the chosen alignment.
The questions vary, depending on the critique: Is it worth spending this much money primarily to reduce travel times by half an hour between London and northern cities? Is the West Coast Main Line actually at capacity, or can it easily be expanded? Will U.K. travel patterns change to a significant enough extent to justify more transportation connections?
Much of the criticism of the project has focused on the line’s segment through the Cotswolds northwest of London, a pristine section of Britain that also happens to hold the residences of some of the nation’s wealthiest. But project planners seem to be unable to find an alternative to that alignment; it has remained the same even after the political transition between Labour and the Conservatives after the 2010 elections. That opposition, however, comes across as NIMBYism, especially since its prime backers call from the affected area.
But the complaint that there is not enough of an economic rationale for the project is more compelling. The government’s own study of the project suggests that the first section would have a shaky benefits-cost ratio of just 1.6. This means that each pound of investment in the project would lead to £1.6 in economic benefits (in today’s discounted currency). Public works projects should be considered in comparison with one another to prioritize investments, and this rating is low.* The government’s own study of the 51M alternative, produced by project opponents as a suggestion to expand capacity on the West Coast Main Line, suggested a benefits-cost ratio of five or six for that less costly scheme.
Up in the air is the issue of whether the system will ever be extended north of Birmingham, to Manchester and Leeds as suggested by current planning, and then further north to Scotland. Of course, the financing to make those expansions possible is lacking, despite the fact that they would improve the benefits-cost ratio of the program to between 1.8 and 2.5, a far better result.
Meanwhile, the delayed completion of the line (it will not enter the construction stage until 2018) forces us to ask whether governmental action today is “final.” The justification of the wait has been that the government wants to first complete the equally huge Crossrail urban rail project for London. But who knows what priorities the government of 2018 will have. Will the high-speed rail project by then have lost political support?
A low cost-benefit ratio, however, does not necessarily mean the project shouldn’t be built.** The 51M scheme would be fine, but according to the government, it would fail to provide the capacity expansions to the rail network the country necessitates. It would force increasing freight shipments onto congested roadways. As the U.K. plans for its future, it has a choice: Allow its existing infrastructure to become paralyzed by disinvestment and a lack of capacity, or invest to expand it. The latter choice will allow for expanded travel and trade, the former will not.
These issues plague the development of many similar infrastructure investment projects. The California High-Speed Rail project, which continues to attract significant criticism from across the country and which lacks the national commitment devoted to Britain’s program, nonetheless represents a fundamental choice about the future of that state. Will it invest in its mobility systems to guarantee that its future inhabitants have access to travel options? Or will it overwhelm its existing infrastructure with the pains of growth? It’s an expensive choice.
- The government’s insistence that the project will create a large number of jobs (and therefore that it is good) improves the benefits-cost ratio only to the extent that external (non-construction) employment growth occurs because of the rail project and wouldn’t otherwise. After all, construction jobs, if that were the priority, could come cheaper: We could pay people to dig holes.
- As long as the ratio is over 1. Otherwise, the project would then produce more costs than benefits…
Yonah Freemark is a senior research associate in the Metropolitan Housing and Communities Policy Center at the Urban Institute, where he is the research director of the Land Use Lab at Urban. His research focuses on the intersection of land use, affordable housing, transportation, and governance.