By Steve Nichol
The directors of HS2 Ltd must be firm believers of the old adage that no news is good news.
It’s no secret that the project has been beset with controversy right from the start – foremost amongst these being the budgetary underestimates that prompted criticisms of both the government’s procurement model for major infrastructure projects and the competence of those at the helm of the delivery company. So, when the Project was hit with a triple-whammy of bad press last week, those embattled directors and their government supporters must have needed it like a hole in the head.
In some ways it seems strange to be questioning whether a project that in 2017 was resoundingly approved in both Houses of Parliament, and then endorsed by a public enquiry in 2019 should still be going ahead. However, the massive economic impact of the pandemic has given new life to the persistent calls for the case for HS2 to be re-examined.
Here we look at recent events and consider what they mean for the project as a whole.
How green is ‘green’?
The unedifying sight of climate change protesters digging tunnels near Euston over the last week, in protest of a project the government has long-touted as a ‘green’ project designed to take vehicles off the roads, was probably seen as unhelpful but not unexpected. After all, the green credentials of this project have long been questioned: HS2’s own mandatory (and therefore, by design, conservative) estimates suggest that HS2 won’t achieve carbon neutrality within its 120-year design life. That, coupled with protests over the destruction of ancient forests along the route, has cast serious doubt over the environmental benefits of this project.
These questions arise at a time when the government is engaging in a major drive, if you’ll forgive the pun, to reduce the carbon footprint of road vehicles. By 2035, when Phase 2 of the project is targeted for completion, new petrol and diesel cars will be banned; meanwhile, electric and hybrid cars accounted for 17.5% of sales in the UK in 2020, a figure expected only to increase (in part due to those government initiatives). This is significant for HS2 because its primary environmental benefit is taking polluting cars and trucks off the road.
HS2 in turn bills itself as the UK’s largest environmental project, based on the number of wildlife habitats being created (60 to date) and new trees being planted (7m in total), amongst much else. These are laudable achievements, made as part of HS2’s desire for a ‘green corridor’ lining the route. But where HS2 might really be able to improve its environmental legacy is by pioneering and supporting new and innovative design and construction techniques to reduce carbon emissions.
In this regard, HS2 touts the new station at Curzon Street in Birmingham as a model of low carbon design, using solar panels on the station canopies and ground source heat pumps as part of an overall strategy to reduce energy consumption and carbon emissions. HS2 claims that the reduction in emissions will be equivalent to the carbon output of 10,000 homes. Alongside that, HS2 and its partners are pioneering new construction techniques, including the use of carbon neutral concrete and electric forklifts.
If HS2 is able to become a genuinely pioneering project in the use of environmentally sympathetic materials and technologies, changing the way that other infrastructure projects are designed and built, then whatever the figures for HS2 alone, its environmental legacy will be a positive one.
That will be critical, because whilst the ongoing environmental protests at HS2 are unlikely to prevent the project being built, they may have a lasting impact on the government’s desire for future infrastructure projects. After all, the massive protests at the construction of the Newbury Bypass in 1996 didn’t stop the bypass being built, but they did have a seismic impact upon the Blair government’s roadbuilding programme.
HS2 will very likely win its battle with climate change protesters; however, it will be vital for the UK construction industry that it also wins the war.
Alongside the protests, HS2 Ltd continues to face claims by Bechtel that HS2 broke procurement rules when it chose not to award the contract for Old Oak Common Station to Bechtel, despite placing it highest amongst its bidders for quality.
Whether or not Bechtel is successful in its claim – and I can assure you that one should never judge the merits of a case based on what is written about it in the press – it is the latest of several criticisms concerning the procurement and management strategy for the project.
Most prominent amongst these was the independent review commissioned by the Department of Transport in 2019, chaired by Douglas Oakervee. That review indicated that it expected overall costs – originally estimated at £56.6bn – to be over £80bn and possibly over £100bn. It, along with the National Audit Office, was highly critical of the Department for Transport and HS2 Ltd for understating the project’s likely costs, underestimating the risks involved, and announcing delivery dates that were over-ambitious. It contended that cost increases were being incurred because of the project’s procurement and contracting strategy, which needed to be re-examined.
It has been said that there is an obvious flaw in expecting HS2 Ltd – a company that depends on the project going ahead for its very existence – to be properly transparent and appropriately prudent with its time and cost estimates. Whether or not there is any merit to that allegation, the mere perception of a conflict of interest here can be very damaging on such a contentious project.
There are undoubtedly lessons to be learned from the issues and the criticism that HS2 Ltd has faced. In this regard it is encouraging that in April 2019, the Infrastructure and Projects Authority, the government’s (self-described) centre of expertise for infrastructure projects, jointly with the Department for Transport, published a booklet of lessons learned from the sponsorship of major projects.
Major infrastructure projects in this country will never be straightforward, and those comparing the record for such projects in the UK with those of other countries are rarely comparing apples with applies. However, that is no reason for complacency, and in that regard the IPA’s apparent willingness to learn from the issues by HS2 is commendable.
HS2 in a post-Covid world
The third in the triumvirate of criticisms levied at HS2 last week was that lifestyle changes post-Covid meant that it was no longer a worthwhile project.
The logic of this argument is that the pre-pandemic predictions of HS2’s value to the country as a whole were based on forecasts of passenger movements that are no longer realistic. The work-from-home revolution means that fewer journeys will be made across the country, obviating the need for “destructive vanity projects” such as HS2, according to Green Party MP Caroline Lucas (amongst others).
There’s clearly some merit to the argument that the pandemic and the consequent national lockdowns have massively reduced demand on the UK’s national infrastructure. Indeed, the Department for Transport have admitted that they have no idea what the demand on the network will be in six months’ or six years’ time. All the models that were used by the government to assess the usage of HS2 and therefore the benefits to the economy went out the window in 2020.
The response from the Department for Transport to this criticism was to point out that HS2 is not a short-term project; it will still be in use 150 years from now, and as such, short-term impacts on demand shouldn’t distract from the longer-term benefits of the project.
This is true. What is also true is that whilst the pandemic has changed the way many of us are working, out of necessity, no-one really knows what the world will look like when the pandemic is finally over. Whilst remote working technologies are extremely useful during a lockdown, many of us will have realised over the past few months just how much easier and better it is meeting and working face-to-face with colleagues and clients alike. It seems highly likely that, when Covid eventually allows, many people will return to travelling for work or business reasons.
In that context it might be said that it would be foolish to assume that there will be no demand for HS2 in a post-Covid world. No-one knows if that is or will be the case. Given the size of the bill for cancelling HS2 – estimated to be in excess of £20bn – it would certainly be a very expensive assumption to make.
Of course, HS2’s critics say that it is a waste of money anyway, and the money could be better spent on the cross-country rail network, improving broadband nationally, improving local public transport and insulating millions of homes. However, given the economic strain imposed on the country’s coffers by the pandemic, it is by no means certain, or even likely, that any money saved by scrapping HS2 would be invested into different construction and infrastructure projects.
Given the government’s repeated commitments to the project as well as the considerable cost of cancellation, it seems highly likely that HS2 will be built. However, that does not mean that either the government or HS2 Ltd can afford to be complacent about the considerable cost of the project, the issues that HS2 Ltd has encountered with its procurement and contracting strategy, the project’s green credentials or the impact of the pandemic.
HS2’s failures, as well as its successes, need to be recognised and understood by both the government and the industry generally, to ensure that the country’s ability to deliver major infrastructure projects in an economically efficient and environmentally friendly manner improves as a result.
If that happens, those who support major projects such as these will have all the ammunition they need to answer HS2’s critics.