Posted 20th November 2012 | 25 Comments
Business case for HS2 'is improving'
OFFICIAL forecasts of the business case for HS2 have been revised upwards, accompanied by a prediction that they are 'very conservative', although opponents of the project are claiming that only a small minority of the public are in favour of it.
In a parallel development, the prime minister has unveiled plans to limit the use of judicial reviews which are intended to thwart or delay major infrastructure projects, even as five HS2 opponents prepare for a judicial review in the High Court in early December.
This comes as the Department for Transport is finalising its plans for the next stage of HS2, taking the network to the North West, the East Midlands and Yorkshire.
The DfT’s announcement about Stage 2 is expected before the end of the year, and has been foreshadowed several times by Patrick McLoughlin since he became transport secretary in September. If it goes ahead, he will have fulfilled his predecessor Justine Greening’s ambition of accelerating the HS2 project by a full year and is also in line with his announcement at the Tory Party conference in September that he wanted to ‘fast track’ the scheme.
Stage 2 of HS2 will see detailed alignments unveiled for routes north of Lichfield, Staffs. A North West arm will serve Manchester and rejoin the West Coast Main Line to enable ‘classic compatible’ services to continue to Lancashire, Cumbria, Glasgow and Edinburgh.
It is believed HS2 will also serve Crewe, following a major campaign by pop impresario Pete Waterman who also runs a rail engineering business in the town and is a leading member of the Cheshire and Warrington Local Enterprise Partnership.
A second arm of HS2 will run from Lichfield to serve the East Midlands, the Sheffield city region and Leeds, together with a link to the East Coast Main line south of York so that ‘classic compatible’ trains can continue to Newcastle-upon-Tyne and Edinburgh.
Douglas Oakervee, chairman of the Government-owned company HS2 Ltd which has been preparing the plans, said: “The die is now cast for there to be two consecutive hybrid Bills to authorise the whole HS2 network.”
HS2 Ltd has built up a substantial team of 1,400 full-time staff to work on both stages of the project, assisted by a significant range of specialist engineering and environmental consultants.
The first Bill, embracing the route from London to Lichfield with a spur into Birmingham city centre and a link across North London to HS1, will be laid before Parliament within a year with the aim of having it passed by both MPs and Lords before the general election in 2015. After that a second Bill will follow in the next Parliament, based on details to be finalised after public consultation on the Stage 2 proposals.
Douglas Oakervee said completion of stage 2 will significantly improve the business case for HS2, about which there has been much argument with opponents.
The benefit-to-cost ratio of the first stage is now put at 1.7 and this improves to 2.5 with phase 2. He said: “We are quite confident these figures are correct – and that they are very, very conservative."
However, opponents are still rejecting the official case for the project. One leading opponent, Joe Rukin, claimed his stance was justified by the results of an Ipsos MORI survey which reports that 4 per cent of those asked said HS2 was a priority.
Building homes was the most popular choice with 40 per cent, followed by improving existing road infrastructure (20 percent), and improving existing rail infrastructure (14 per cent).
Mr Rukin said: "The results of this survey are no surprise to us. For three years Governments have allowed themselves to be seduced by the idea of high-speed rail, as sold to them by lobbyists from vested interest groups. They have totally lost sight of what the public know is really needed to get Britain going again, which is not chucking billions into an unstrategic, unjustifiable, unenvironmental black hole vanity project which will only be any use to the richest in society."
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"The anti-HS2 brigade is at it again — asking a selective question
and then interpreting the answers to promote its own ends."
Another view – in the Railnews Blog
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Michael Turberville, London
I do not understand the preoccupation with the Need for a Business Case for something that is Required and Needed to be Built. China can decide to build a LGV Network and actually Built more track km's than the rest of the world combined in less time than we can build a 100 miles! EH? Why is that Not the Question? What takes so long for anything to happen in UK?
Fact is in less than 15 years, the actual track's on the WCML will have to be replaced as they will be end of life, if this new Line is NOT Up and Running, ... just think back to the decade it took to replace the track's the last time. People seem to think that the WCML tracks on the lines are there and good for a century! They are Not. By 2025, they will be worn out and due for replacement. With HS2, the track replacement on the WCML can be done in a fraction of the time as the fast lines will be diverted.
Shame no one can see any further ahead than the nose on their face - that is why we will be stuck with just an up/down on HS2 when it should be TWO up and TWO down and passing loops etc...
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The correspondence on this topic is now closed—Editor.
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Peter Davidson, Alderley Edge, NW.England
@Tony Pearce
You've excelled yourself this time, posting a plethora of misleading nonsense, which appears to have been culled directly from various anti-HS2 websites?
Ah...the Daily Mail - the epitome of objective, evidence based journalism - if they report something it must be true?
Yes, HS1's progress was checkered but you've conveniently forgotten to mention who was funding the project at various stages - HS1 began life as a privately financed project (LCR's involvement) - and look what happened.
After the state took over, the project was finished on time (against the rescheduled timescales) and more or less on budget (contract price was £5.8bn - reported total cost came out at £6.1bn)
If you're going to post some facts at least show all of them, not just the parts that appear to support your viewpoint?
When I have some more time, I'll respond to your commentary about Kohr and Schumacher - again quoted completely out of context!
Chris Neville-Smith, Durham, England
@ Tony Pearce
I assume what you are referring to here is the NAO report on the passenger forecasts for HS1. I am a little confused that you are swift to dismiss the forecasted costs and benefits for HS2 as "usual nonsense from civil servants" but you are prepared to take a report from HS1 - which is still a forecast of eventual costs and benefits written by civil servants - as hard evidence. Nevertheless, it's something that needs to be taken seriously.
There was a big problem throughout the late 1990s of thinking that you could get major infrastructure projects for free; private investors would pick up the tab. We now know that doesn't work. It didn't work for HS1, it didn't work for the WCML upgrade, and it didn't work for the M6 Toll. What all of these have in common is wildly optimistic forecasts aimed at persuading investors to part with their money.
That does not automatically mean none of these projects should have been done; merely that we should have accepted it was going to be either taxpayer-funded or not at all. And the figures for HS1 are still not that bad. I personally think BCR calculations on projects of this scale are a waste of time myself (we have no way of confidently predicting what passenger numbers or government interest rates will be in 10 years' time, never mind 70 - and that is just as much a danger of doing nothing as it is of embarking on a major project), but on the NAO's figure, the total cost of taxpayer support, including debt interest of 70 years, is £10.2 billion. The benefit of journey time alone are £7.0 billion (all figures at 2010 present value). This leaves another £3.1 billion over 70 years in benefits to get from other sources to make up the numbers, Given the pace of regeneration going on in St. Pancras and the praise given by Council leaders in South Kent, that shouldn't be too hard.
But yes, the final BCR will probably be lower than expected. the Jubilee Line extension, on the other hand, went up from 0.9 at the time of construction to an estimate 1.75 now, in spite of cost overruns. Moral: BCR can go up as well as down. And on top of this, we have a much better idea of how many people are going to be travelling from London to Birmingham and the north-west by train, because they're doing it already.
(Strangely enough, we never hear the anti-HS2 crowd arguing that the WCML upgrade or M6 Toll should never have been built. Maybe, just maybe, it's because one would alienate their pro-road anti-rail supporters, and the other would undermine their argument that their magic super-duper RP2+ package will definitely definitely definitely definitely solve all rail problems and the WCML and any actual WCML passengers who complain about what happened last time we did something like this can shut up.)
The NAO report is a valid point. After that, your arguments go downhill very quickly ...
"Do you really expect Airlines and WCML to lose passengers to HS2 without a fight."
Or, to look at it another way, do you really expect HS2 to make itself so expensive that everyone uses the airlines and the WCML instead? The only price quoted for travel on HS2 is the assumption from HS2 Ltd. that prices will be about the same as WCML prices, which varies hugely depending on whether you want a fully flexible ticket for peak business travel or a fixed ticket at off-peak travel, same as the airlines.
Anyone who is routinely paying £300 for return tickets from London-Birmingham deserves to be parted from his money.
"How will the rail Unions exploit any future HS2 network to increase wages for its members ?"
Not much differently from what we've got already, I should imagine. If anything, I would guess it would make it slightly harder. Holding a country to ransom when your workforce holds a monopoly on a asset is one thing. Doing the same when you drive all your customers away to a competitor is not such a good idea.
"Terrorism is the plague of the century so far. Will HS2 become a target (like Airlines)"
Modern terrorism is aimed as killing as many people as you can. Airlines are an easy target because if you down an airline you kill everyone on board. Packed commuter trains make a far easier target than long-distance trains.
If high-speed trains were the chosen target for terrorists, don't you think we'd have seen this by now? They've been going on the continent for decades.
Norm , Holy Face
If the desire is to increase capacity at the southern end of the WCML why did the government ( of the day) not piggy back on Chiltern's recent upgrade, to electrify and upgrade to 200k London Mb to Birmingham ?
Also what are the current estimates for upgrade to the Welwyn viaduct, removal of the crossing at Newark and upgrade to 4 track where possible ?
Will the desision to upgrade the MML to 200k allow some Leeds trains to be diverted to St P releasing paths for additional faster trains to Scotland ?
All these things could hapen now, or very soon, we still need HS2 but we also need additional capacity now.
John Edwards, Woodford Halse
For heaven's sake, when will this fiasco be cancelled? With four lines already going to Birmingham, what is the sense in a fifth, especially as the existing routes have plenty of capacity for expansion/upgrade?
Rail package 2 would achieve everything claimed by HS2 plus a great deal more for a fraction of the price and destruction of the countryside.
Chris Neville-Smith, Durham
"The M40 corridor idea is reported as being dismissed 'early on'. A pity. Everyone in that Corridor already has to put up with noise and light pollution 24/7 hours from the Traffic, and the protests may well have been less than the current suggested route."
We had a consultation. Hrdly anybody asked for it. The protest groups wanted the project scrapped compeltely, not rerouted. I am quite sympathetic to the motorday corridor idea myself, but I don't see why we should allow the antis to demand thorough investigation of one alternative after another when i) they're doing it to stall the project and ii) the majority of antis have no interest in using railways anyway.
"Is the subsidy for TGV affecting the support for the rest of the Network ? Could that happen in the UK ?"
Well, bearing in mind the latest round in rail funding overlapping expected contruction of HS2 goes over and above what most people were expecting, the evidence points to no.
"I do have a passion for small projects after seeing successive Governments screw up 'big projects' . My Bible is 'Small Is Beautiful' which comes from 'Economics As If People Mattered' - a collection of essays by British economist E. F. Schumacher."
Ther WCML upgrade was a "small" project. Can you remember what happened?
Peter Davidson, Alderley Edge, NW.England
@Tony Pearce :"I travel a lot round Europe both by train and air. In France they have a nice shiny TGV network which requires about £500 million subsidy a year. .......... Is the subsidy for TGV affecting the support for the rest of the Network ?"
This is complete and utter bunkem (why am I not surprised about that!) The actual opposite is true - the TGV network makes a healthy profit and subsidises the unprofitable rural network - not the other way round - do get your facts straight to begin with!
Peter Davidson, Alderley Edge, NW.England
@Tony Pearce: "Now the Chilterns route has had so many new concessions such as the tunnel under Amesham that it might be worth going round again and looking at the M40 idea again."
Why - how many times does it need repeating before you acknoweldge this reality - routing HS2 next to the M40 would result in much larger numbers of homes/businesses being disrupted/demolished, compared with the approved ROUTE3 pathway - have you grasped that fact now!
Tony Pearce, Reading UK
HS1 - a few facts from Wikipedia.
London and Continental Railways (LCR) was chosen by the UK government in 1996 to build the line and to reconstruct St Pancras station as its terminus,
By May 2009 LCR had become insolvent and the government received agreement to use state aid to purchase the line and also to open it up to competition to allow other services to use it apart from Eurostar.
But that only tells us to be careful of big projects, not that they will fail.
More from the Daily Mail ..
Over-optimistic forecasts for passenger demand have left taxpayers 'saddled with £4.8billion of debt' over the HS1 Channel Tunnel rail link, a report by MPs said today (6th July 2012).
These 'unrealistic estimates' for the London to Folkestone HS1 link must not be repeated when the business case is made for the proposed London to Birmingham HS2 high-speed line, the report said.
Total taxpayer support for the 68-mile HS1 over the period to 2070 is likely to be £10.2billion, the report from the House of Commons Public Accounts Committee added.
My comments ... Do you really expect Airlines and WCML to lose passengers to HS2 without a fight. I would have thought that if the price quoted for travel on HS2 (£300 return Brum to Euston) is true then WCML and the airlines will have no problem keeping all of their customers. The big question then is 'How much new business can they get?'. I haven't a clue.
Another question .. 'How will the rail Unions exploit any future HS2 network to increase wages for its members ?'
And the last quetion .. ' Terrorism is the plague of the century so far. Will HS2 become a target (like Airlines) and what measures need to be put in place to combat this threat, real or just Hoaxes?'
Peter Davidson, Alderley Edge, NW.England
@David C Smith
Many thanks for your constructive response
I suppose it depends on your perception of HS2, phase 1
I see it as merely the first small element in a much larger project. If a long-term rejuvenation of the rail network, with High Speed at its heart. does unfold over the next thirty years or so, leading to continued relentless growth in rail patronage (transfers away from road and short haul air), your relatively modest (compared with the plan for HS2 phase 1) strategy for the section between London and Birmingham might begin to look like ill-conceived penny pinching, compromising the ability of the entire emerging high speed network?
Viewed in isolation I can see how your idea boasts merit but from a more holistic and long-term perspective I think it's short sighted?
Tony Pearce, Reading UK
The M40 corridor idea is reported as being dismissed 'early on'. A pity. Everyone in that Corridor already has to put up with noise and light pollution 24/7 hours from the Traffic, and the protests may well have been less than the current suggested route.
Now the Chilterns route has had so many new concessions such as the tunnel under Amesham that it might be worth going round again and looking at the M40 idea again.
I travel a lot round Europe both by train and air. In France they have a nice shiny TGV network which requires about £500 million subsidy a year. The rest of the French Network is in many places in a bad way. I've noticed many thousands of freight wagons rusting in unused Industrial sidings and lines (with again a shiny new train) with but a service of one train a day.
Is the subsidy for TGV affecting the support for the rest of the Network ? Could that happen in the UK ? Will the UK (and EC) economy every recover ? Debt levels are going to take 20 years to get paid off even with everything starting to go right soon.
I do have a passion for small projects after seeing successive Governments screw up 'big projects' . My Bible is 'Small Is Beautiful' which comes from 'Economics As If People Mattered' - a collection of essays by British economist E. F. Schumacher. The phrase "Small Is Beautiful" comes from a phrase by his teacher Leopold Kohr and is often used to champion small, appropriate technologies that are believed to empower people more, in contrast with phrases such as "bigger is better". (I acknowledge some facts above are taken from Wikipedia )
Chris Neville-Smith, Durham, England
"HS1 was a complete disaster especially financially"
I take it by a "complete disaster esepcially financially" you mean the tired argument over it costs £5.1bn to build and a concession being sold for £2.1bn apparently meaning it's a £3bn "loss".
Well, another way to look at it is that was got a £5.1bn railway for the price of £3bn. And £3bn to allow people to get to and from Kent in a sane journey time seems quite a good deal to me. The faster Eurostar journey times is just a bonus.
Alternatively, if you want to trot out the line that any infrastructure project that not instantly recoup all the money into the Treasury through rail concessions or ticket revenue or tolls or whatever, that's fine provided you also believe that no motorway should have ever been built. Because no motorway has ever directly recouped the costs of building it. In fact, apart from the odd bridge that has tolls, all motorways incurred a 100% loss by that logic.
But the majority of anti-HS2 crowd has such an obvious anti-rail agenda I guess that what they really consider a "complete disaster" is the fact that money was spent on, eurgh, trains.
david c smith, milton keynes
In reply to Peter Davidson
The crux of my suggestions was that we have two different needs, capacity relief for WCML and higher speed for longer distance intercity, and it might be better to treat each on a "horses for courses" basis rather than a "general catch all" one. As far as the actual route of a new WCML btpass line is concerned, possibilities would be Tring - Nuneaton ( with London - Birmingham continuing to use current WCML or Chiltern routes ), or Tring - Birmingham - Lichfield. It's a moot point whether it is worth increasing speed substantially on London - Birmingham over a relatively short journey.
As for the Euston - Tring section, it would seem the costs of a new line under the Chilterns and through North West London (with all the demolition that would involve) would be substantially higher than that of enhancing the existing line, even including costs of disruption in the latter case. How many people remember the wider costs involved in ploughing an urban motorway through North London back in the 1960's ?
Otherwise,the East Coast route running largely through flatish open country lends itselt better to TGV+ speeds for London - NE - Scotland needs. Such a line would also obviate the need for London - Yorkshire - NE trains to use the West Coast new line, thus easing the capacity demands on it.
Of course, none of us has enough information to hand to make definitive judgements - I'm just posing questions that I believe need addressing.
Tony Pearce, Reading
HS1 was a complete disaster especially financially - please read Wikipedia on the subject. I can't think of a worse example in how to manage a project.
Peter Davidson, Alderley Edge, NW.England
Some confused thinking going on here
For example @David C Smith advocates upgrades between Birmingham and London (selected by-passes) with traffic re-joining the existing (enhanced) network.
There are two rather large problems here;
Firstly the disruption involved in this strategy, in terms of properties and/or businesses impacted and the ongoing negative effects on the existing network would be huge, disproportionate in terms of the relatively modest improvements this strategy might potentially deliver
Secondly, the principal rationale driving HS2 is the provision of massive new capacity where it is most needed - I understood this capacity crunch was going to make itself felt first between London and Birmingham - this plan will feed large numbers of additional services straight back into that area of relative gridlock - not such a good idea?
@Tony Pearce suggests construction alongside the M40 - this idea was looked at by HS2 Ltd and dismissed at a very early juncture, principally because it would involve demolition of/disruption to a much larger number of properties/businesses than the approved route, again for little beneficial gain relative to the approved route.
There seems to be a limitless well of experts out there who think they have a better plan than HS2Ltd, who are armed with reams of detailed geographical and topographical data - maybe I'm just being naive here but I'm minded to leave the choice of route up to the experts (by the way my house might just be in the firing line when phase 2 is announced, although my educated guess reckons it will be about 3000m west of where I live)
Melvyn Windebank, Canvey Island, Essex
Tony Pearce needs to be reminded that HS1 (CTRL) came in on budget and time and was privitely financed, it to be as this was the clincher that got Margaret Thatchers support!!
As for forcasting demand then we are lucky Brunell built the GWR with a capacity that even he could nebver dream of at the time, while in places where they penny pinched passengers have sufferred ever since from lack of capacity to grow!!
While the legislation for HS2 may come in two parts its construction still needs to be as a single project thus allowing sections in the north that will create more capacity and speed more quickly to go ahead much sooner that the two stage plan allows.
What is really needed is Infrustructure legislation like other countries have that allow major projects to not get bogged down in local campaigns that affect a tiny section of the whole route.
Tony Pearce, Reading
For those of you interested in High Speed rail, I suggest you study the 140 mile Koln - Frankfurt High Speed line. It is directly comparable to the UKs HS2 unlike comparisons with Japan and China. It trains run at a maximum of 186 mph, and it was deliberately run alongside A3 autobahn for environmental reasons. It was 2 years late in building and killed 13 workers. It is deliberately targeted at supporting Air Travel but has also captured some of that market. It has boosted other rail feeder services. It also had numerous court challenges and geological problems. I cannot find out the predicted or actual costs or passengers numbers. They would make interesting reading.
Tony Pearce, Reading
Demand for Air travel is falling in the UK because of very high Taxes on flying. I had to change at Manchester the other day (coming from Isle of Man) and had to pay another set of taxes just for changing plane. (Cross Country train home from Southampton) Presumably all of you are aware that 60% of your petrol costs are tax. Rail is hugely subsidised with no taxes. I am a Eurotunnel shareholder but I would not invest in a similar HS2 scheme. It it were upto me I'd run the new line alongside the M40, and have a couple of Parkways Stations between London and Brum. I would limit speed to 200 mph at most because of energy costs, which are bound (?) to rise. In the 1960s everyone thought spped was essential for Flying so they built Concorde. History proved them wrong and the future seems to be the A380 airbus with 853 people at 560 mph.
david c smith, milton keynes
Have the government proposed the optimul version of HS2 ? They eem to be confusing two different aims.
Firstly there is a need for capacity relief, especially on WCML London to Birmingham / Manchester / Liverpool are too short - distance to reap much benefit from 250mph speeds ( rail already has a "lion's share!" of custom on these routes ). It would probably suffice, at substantially lower cost, to have new - build stretches with 155mph capability to bypass the congested sections, whilst utilizing the existing route ( enhanced) through the London suburbs and Chilterns out as far as Tring
On the other hand the market for rail travell from London to Newcastle / Edinburgh / Glasgow is much more in need of speeds around 200mph, in order to try and give a sub - 3 hour journeytime ( the point at which rail becomes much more competitive ). I understand from an ex - railway civil engineer that trying to build seriously high - speed infrastructure fom near Manchester to Glasgow / Edinburgh would be horrendously expensive, due to the topography. Would it make more sense, therefore to take any 200mph line to Scotland via the ECML route, partly on new - build line and partly on enhanced existing route ? Would this be a better Benefit / Cost scheme ethan that currently proposed ?
Peter Davidson, Alderley Eadge, NW.England
@Tony Pearce
And I see you are regurgitating the usual nonsense arguments from the anti-HS2 crowd?
Let's rewind the clock to the early 60s and consider the then (new and radical) proposal amongst central govt. to begin construct a comprehensive nationwide motorway network. I think we'll find that idea was also based on future demand modelling, equally open to potential flaws.
I wonder what state UK plc would be in now if we'd listened to the siren voices from that period, urging caution, let's wait and see, forecasts can be wrong, etc. etc. I can think of a few choice terms - none of them very complimentary!
Fact is the demand modelling for HS2 is very, very conservative and highly likely to prove undercooked.
Finally, private firms WILL build HS2 and they will probably (eventually) end running it (on a lease-hold basis), that's what happened with HS1.
Looking back to our 1960s motorway precedent, running of the network was, from the outset, a matter for the state - no private firm will offer to build and run HS2 in the manner you describe, quite simply due to the timescales involved in delivering a return on investment – you know that already, which is why you advance this facile argument.
You present irrelevant factors in order to deflect the debate from consideration of clearly established, relevant trends; falling private car ownership (particularly pronounced amongst the young 18-24 year-olds), falling demand for short-haul air, corresponding relentless increases in demand for rail
Time to press on with HS2, sooner rather than later!
Chris Neville-Smith, Durham, England
"they over-estimate need /numbers for long distance travel, but consistently underestimate demand for local services"
You cannot possibly know which future passenger numbers are being overestimated or underestimated without waiting, but that doesn't matter. What matters is that HS2 will benefit both long-distance travel AND local travel. In fact, the biggest winners of HS2 will be the people who live at intermediate stations along the WCML. At the moment, it is impossible to provide a regional service that properly meets demand because line capacity is eaten up by non-stop trains to north. The plans for a post-HS2 service pattern will be a vast improvement.
The argument that it's either HS2 or improving local services is a very tired one. The government can do both. And it is.
Andrew Bosi, London
they over-estimate need /numbers for long distance travel, but consistently underestimate demand for local services
Chris Neville-Smith, Durham, England
No, we can't be certain of these figures. Neither can we be certain that if we don't build the line, or do the patch and mend that HS2 opponents are so sure solves everything, everything will be fine and our infrastructure will definitely be able to cope with future passenger numbers. Either we risk over-provision, or risk under-provision. And the risk of under-provision is a lot more serious.
You are welcome to advocate prohibiting any new major infrastructure project that is not funding in its entirety by private investors provided you apply that to roads as well. Which would almost certainly mean we would not have built a single motorway.
Leslie burge, leicester
We need a high speed network.
It works in other developed countries such as Japan and France.
Electrified it will be greener than internal air traffic.
And will also create extra capacity on the overcrowded West coast
route, Hopefully allowing more freight to be moved off of roads, also reducing
our carbon footprint.
The sooner we get on with it the better both for the economy,jobs and the country.
Tony Pearce, Reading
Usual nonsense from Civil Servants. Can they be even remotely sure of (1) Construction Costs (2) Borrowing Costs and Interest Rates (3) Operating Costs and energy prices (4) Passenger Numbers (5) Competition from Air, Road and the Railway Operators of WCML and Chiltern. No they can't and neither can I. But History seems to indicate that Governments massively under-price Construction Costs and massively over estimate Passenger numbers. If the Government is so sure of its numbers then they should hand the whole project over to a private firm to build and run. I suggest they won't find even one firm interested.