Report says HS2 ‘on track’ for delivering a return on Government investment

PwC has produced the first analysis of what the Government could expect to see as a financial return if it sells the infrastructure of High Speed 2 (HS2).

Figures show the line could produce between £6bn to £7bn as a return on its £13.9bn investment.

The report, written by PwC for Greengauge 21, a ‘not for profit think-tank’ researching the economic impact of high speed rail for Britain, has calculated the return if HS2, like HS1, has its infrastructure sold off under a 30-year concession.

All figures are shown in 2009 net present value terms.

The report comes days before the end of the public consultation on the project and focuses on the costs and revenues associated with the planned 175km high speed route between London and the West Midlands.

The current timeline for HS2 is for it to open in 2026 with a potential sale once built.

Once up and running, it will allow speeds in excess of 200mph and an estimated journey time of just 49 minutes between London and Birmingham.

Richard Abadie, PwC partner and global head of infrastructure finance, said:

“HS2 will represent a significant investment in the UK’s national infrastructure. Given the pressure on Government finances it is important to minimise the financial impact of this investment through asset sales.

“Our report says the Government may be able to sell the infrastructure for between £6bn-£7bn, representing up to 50% of the initial design and construction costs.

“This will be a key consideration in the continuing affordability debate, not only for HS2, but for the wider high speed network,” he added.

The report is based on the planning assumptions developed by HS2 Ltd, with a journey time from London to Birmingham of 49 minutes, anticipated peak train frequencies in 2026 of 11 trains per hour on the high speed track from London to the West Midlands, and then onto Manchester, Liverpool, Preston and Glasgow.

Fare prices are assumed to increase in line with the rest of the rail network.

In November 2010, the Government completed the transfer of a 30 year concession of HS1 to a consortium for £2.1bn.

The sale took place shortly after the completion of the 108km line that cost approximately £5.8bn to design and build.


Please enter your comment!
Please enter your name here

Latest Rail News

Divers protect Cumbrian rail routes from fast flowing river erosion

Rail passengers on two major routes in Cumbria now have faster and more reliable journeys after railway engineers protected...

More like this...