US United States

Consider HS2 within wider networks to gauge true value

Transport megaprojects tend to make rather gloomy reading. The prevailing opinion, at least among social scientists, is that all big infrastructure projects share three characteristics: they take longer…

Arriving at a station near you (if you’re in Taiwan). jiadoldol/Flickr

Transport megaprojects tend to make rather gloomy reading. The prevailing opinion, at least among social scientists, is that all big infrastructure projects share three characteristics: they take longer to build than planned, always end up costing more (often considerably more) than budgeted, and hardly ever deliver the benefits promised when politicians were pushing them through.

So it is no surprise that High Speed 2 is a hugely controversial project, especially after the projected cost has spiralled to £42.6 billion according to the June 2013 spending review. Tough questions about the value to the taxpayer are predictably being asked.

What is perplexing is that both those for and against the HS2 project seem to rely on serious research, yet the two sides present entirely contradictory numbers. There are many reasons for this, and they have little to do with HS2 itself. Rather, they are largely rooted in the nature of cost-benefit analysis in large, complex transport projects.

Measuring the benefits

Quantifying the benefits of a transport megaproject involves estimating the economic value of the indirect, as well as the direct consequences of building it. This, however, creates a serious problem of attribution – to what extent can we assume the specific project to be the cause of indirect outcomes?

In the case of high speed rail, an example would be the reduced air pollution from people switching from car to rail travel. This benefit can be quantified in monetary terms, although the methodology is not uncontroversial. As one adds the gains to public health from fewer road accidents, reduced stress levels, more walking; or the improvement in community cohesion as people spend less time isolated in their cars, quantifying benefits becomes even more challenging.

Experts fundamentally disagree on how to monetise such things, and how much can be attributed to a single infrastructure project. Even more so as the rest of the world is not standing still while infrastructure is being built: attitudes to driving and fuel prices change, also influencing mobility decisions. Job creation is a notorious example of hazy attribution, convincingly challenged, for instance, in the case of the Docklands Light Railway.

Another controversial aspect in cost-benefit analysis is the lifespan of transport projects used in calculations. Across Europe, it varies From 20 years to infinity, which means figures such as passenger numbers, or operating costs, can depend entirely on the approach taken.

Time saving

One of the most debated aspects of HS2, as well as transport megaprojects in general, is the notion of travel time saving.

First, the time savings argument relies on the idea that stationary time is more “productive” than time on the move. At the fundamental level, the idea of “productive” time isn’t clearly defined: if I spend two hours gazing out of a window, and then spend an hour painting an award-winning landscape, how many hours have I spent productively?

Consider this paradox in the productive time argument for HS2: if the HS2 trains come with free broadband internet on board, this would hugely boost the productivity of passengers, and also undermine the very calculation of time saving the HS2 project is sold on.

Second, there are a growing number of studies suggesting that this may be the wrong concept on which to base valuations – in most cases, new transport infrastructure is about more accessibility, not about spending less time on the move. Increasingly, suggestions are being made that other aspects, such as reliability of timetables, or reduced need to switch between transport modes, may be much more valuable to passengers. Researching such hypotheses, and rethinking the HS2 business case accordingly, may yield completely different results.

Both sides can point to plenty of research to show they are right BhamFOE/Flickr

These are some of the considerations which lead me to doubt that there is a meaningful way to estimate the economic value of HS2. Linking a high-speed rail project to specific GDP growth figures or job creation rates is methodologically unconvincing. It can distract from the absence of real, effective measures addressing such issues, by making it a question of one project under-delivering on expectations.

However, the wrong arguments in support of HS2 do not mean there aren’t plenty of compelling ones. Car dependency is clearly harmful in terms of land and energy use, as well as to social and spatial cohesion, public health, and public space (not to mention its unaffordability to many), and regional air travel is at least as problematic.

Consequently, high-speed rail can be a viable solution for mid-distance travel, and it makes an excellent backbone of a national transport network. If considered in terms similar to other essential infrastructure – such as wastewater treatment plants, or lifts in tall buildings - a discussion of high-speed rail would be not about whether to build, but how to get the most out of something that has to be built in any event.

This implies comparing alternatives, but only closely related and actually comparable alternatives: a recent New Economics Foundation report compared the value for money of HS2 with wi-fi hotspots and cycling lanes, an approach which relies heavily on problematic assumptions like those mentioned above.

Instead, alternative routes, or the possibility of building the Phase 2 Sections to Manchester and Leeds first (especially if redressing the North-South imbalance is really a priority), should be considered. Such an approach would allow HS2 to be evaluated not as an individual, compartmentalised project, but in terms of its place in a larger system.

This latter point is crucial when trying to estimate the value of new transport infrastructure, because once completed, a high-speed rail link is not a standalone entity. Instead, its function is determined by whether and how it is connected to broader infrastructure networks.

Just like a cost-benefit analysis of a lift in a building is meaningless if it does not take into account the uses of the building and its role in the area, or the condition of stairs and escalators, infrastructures are made by the networks of things big and small which they are attached to. Acknowledging that the worthiness of HS2 is dependent largely on its integration in the overall mobility system of the UK would highlight the fact that improved service integration is the best way of making it valuable to the tax payer.

Significant results can be achieved through investing in measures which are very small in comparison to the cost of the project itself. These include bicycle infrastructure to and at stations, free wifi, shuttle buses, seamless local transport connections, and that hottest potato of them all – measures to discourage car travel where high speed rail capacity becomes available.