High Speed 1 cost taxpayer billions

HS1, which carries high-speed Eurostar trains from St Pancras to the Continent, was meant to pay for itself, but failed to predict the growth of budget airlines and discounted ferry crossings.

MPs say ”unrealistic estimates” over the HS1 link must not to be repeated when the business case is made for the London to Birmingham HS2 high-speed line.

International passenger numbers on HS1 are only a third of the contractor’s 1995 original forecast and two-thirds of the Department for Transport forecast in 1998, the House of Commons Public Accounts Committee report added.

London & Continental Railways Ltd was awarded the contract to build HS1 in 1996. Two years later the DfT agreed to restructure the deal, guaranteeing most of LCR’s debt, after Eurostar revenues were substantially below LCR’s forecasts. The line will continue to cost the taxpayer - £10.2bn over the next 60 years.

Committee chairman Margaret Hodge said: “HS1 was supposed to pay for itself but instead the taxpayer has had to pay out £4.8bn so far to cover the debt on the project.” She went on: “This isn’t the first time that over-optimistic planning and insufficiently robust testing of planning assumptions has got the department into trouble. My committee’s report on the East Coast Mainline raised similar concerns.”

The DfT said HS1 was an integral part of the transport infrastructure, carrying millions of passengers a year, and its sale had generated more than £2bn for the taxpayer. HS2 presented the “most effective” solution to the “looming” capacity crunch on the West Coast Mainline.

Meanwhile the Humber LEP is calling on the Government to invest in the Humber rail network. It wants the the current trans-Pennine electrification programme, which is due to go from Manchester to Leeds and York, to be extended to Hull.