Political gamble and against-the-odds are both descriptions used to describe probably one of the few private sector successes in challenging a major government infrastructure scheme.
Mark Bostock is former director with Arup
Thirty years ago, I was in Blackpool where the secretary of state for transport Malcolm Rifkind made his dramatic announcement at the Conservative Party Conference that the government would support the alignment for the Channel Tunnel Rail Link (now HS1) proposed by Arup rather than its own which faced serious opposition issues in south east London. The change was later confirmed by a Parliamentary Statement 30 years ago today. What a victory!
Our preferred route for the high-speed rail link was to enter London (Kings Cross) from the east via an intermediate station at Stratford. It was ranked far better for the environment, demonstrated an acceptable risk profile and had significant transport benefits with its connections to existing networks when compared with the government/British Rail proposed alignment entering London from the south east to connect with Waterloo.
As I look back, it was an exceptionally brave initiative for Arup, the technical consulting firm set up as a mutual business which attracted seriously creative skills. While we were able to come up with the best solution for linking the Channel Tunnel portal with London, we realised that we needed strong and effective political support. We achieved this through two far sighted politicians from different political parties. This combination of two political heavy weights with Arup created an unlikely partnership but this support would not have come about had we not come up with a strong case.
Arup alignment for what is now known as HS2 had less impact than the route initially backed by government
We developed five basic principles. Firstly, the new infrastructure had to be built within existing motorway corridors wherever possible. Secondly, it needed to connect with the existing network to allow high speed commuter services to London to operate. Thirdly, it had to avoid Areas of Outstanding Natural Beauty (ANOB) and, if we could not, we should tunnel underneath them. Fourthly, we should identify suitable intermediate stations as a catalyst for regeneration and I am reminded that our alignment meant that London could select Stratford as a winning Olympic Games venue. Finally, when the route entered the London tunnels, it had to be under an existing transport corridor if at all possible. There was no specific mention of speed as we knew it had to be designed over ground for 300kph. That gave us scope to devise a railway which minimised environment impacts.
Indeed, in Rifkind’s Parliamentary Statement on 14 October 1991 stated: “Only two domestic properties would be acquired and none demolished, as against 127 acquired and 24 demolished on the [British Rail] southerly route. British Rail further estimates that only five properties would be within 100m of the line and 115 within 200m against 1,900 and 5,900, respectively, on the southern route.”
After the excitement of the win we had to compete to deliver the railway with our alignment! I, together with Nick Wakefield from merchant bankers S G Warburg, set up London & Continental Railways and, together with our partners, delivered this 109km railway on time and under budget (£6.2bn outturn prices, NAO, 2012). No mean feat.
I find it incomprehensible that this delivery model has not been used again and again. But government reverted to excessively expensive public sector delivery models, which despite the over emphasis on governance have failed to deliver as if it was in the private sector – on time and within budget.
The Channel Tunnel Rail Link (now HS1) is a good story. Sadly, government selected the alignment in the absence of any agreed National Transport Strategy. They failed to accept our proposals to make Stratford a very significant east London hub by creating a connection with the north London and Lee Valley Lines to link Europe with Cambridge and beyond. More significantly, our proposal for Kings Cross/St Pancras was designed to be a through station linking up with any one of the three main lines connecting London with the West, or Midlands or the East of the country. A hugely missed opportunity, particularly now when there is an even greater environmental case for switching short haul flights to rail.
The CTRL, commissioned by the Queen in November 2007, meant that London was better connected with Paris and Brussels than with the rest of the country.
Connecting HS1 infrastructure
The question that then followed was how best this infrastructure could be extended? The obvious first step was to connect Heathrow airport as a first stage of a link to the north. A venture opportunity was developed over the next eight years during which time there were seven secretaries of state for transport and three prime ministers – a very complex political environment!
Heathrow Hub Ltd was set up by Arup as a special purpose vehicle to design, own, finance and operate a major multi-modal transport complex plus the associated developments. Arup owned 85% of the company and secured the necessary land options.
Arup was also behind the Heathrow Hub proposals
The chosen site is where the M25 crosses the Great Western Main Line was less than 4km from T5, and well suited as a multimodal transport hub with the potential for direct access to the airport, good linkages with the existing road and rail networks, the opportunity to connect with HS1 and the potential for extending the rail infrastructure to the north.
After many discussions, British Airports Authority started considering taking an equity position in 2008. While the Conservative party supported us, it was impossible to get any traction with the Department for Transport until Labour appointed Ruth Kelly as secretary of state. During summer 2008, she wanted her officials to review our proposition to extend the high-speed railway to Heathrow at a time when officials were not mandated to consider high speed! Unfortunately, her term in office was too short.
Geoff Hoon was appointed her successor in October 2008. Realising that BAA was considering a stake in Heathrow Hub, the secretary of state advised me not to proceed until after his major announcement was made in the following year. My agreement was an error of judgement!
In January 2009, Hoon set up HS2 Ltd “to consider the case for new high-speed rail services from London to Scotland”. As a first stage, Hoon asked HS2 Ltd to develop a proposal for an entirely new line between London and the West Midlands; that would enable faster journeys to other destinations in the north of England and Scotland, using both existing lines and a new high-speed rail network.
Hoon commented: “I see a strong case for this new line approaching London via a Heathrow international hub station on the Great Western line, to provide a direct four-way interchange between the airport, the new north-south line, existing Great Western rail services and Crossrail, into the heart of London.”
Hoon concluded by stating this hub should be located in West London on railway owned land (Old Oak Common). So, the Birmingham line was planned as a 400kph high speed connection from Old Oak Common. We had been totally out maneuvered.
HS2 Ltd engaged Arup to do the preliminary design work – a clever move to silence Heathrow Hub Ltd which resulted in Arup selling its interest in the special purpose vehicle. Personally, this decision was hard to take. The advantages of our multi modal hub with its direct airside connections to the country’s only hub airport and to fully integrate this into the high-speed proposals was an obvious winner. HS2 Ltd never considered this an option as they had been directed to Old Oak Common.
Heathrow Hub proposed an alternative route for HS2 to add a connection to Heathrow to the line
Heathrow Hub Ltd, without Arup, continued to develop its case and submitted proposals for the Phase 1 HS2 railway to Birmingham, largely using the M40 corridor and applying the five principles that Arup had developed on HS1 and to the same specification. However, every proposition we submitted to HS2 was rejected principally because of an obsession with a 400kph design speed, reflecting an appraisal methodology that valued each minute of journey time saving at between £300M and £600M. This necessitated an arrow-straight line driven through open country, crossing the Chilterns AONB at its widest point and missing Heathrow for the sake of a three to four minute time saving. Subsequently, HS2 found that, allowing for acceleration and deceleration, even the revised lower maximum operating speed of 360km/h would be possible over less than half of the route.
Goodness, what an appalling way to determine the right alignment for what is the largest ever peacetime investment of public money in a single project.
Plans to increase capacity at Heathrow gave us a further chance to develop our proposals to integrate our hub with the airport. Together with an outstanding aviation expert, we developed a plan to extend the northern runway on a phased basis at considerably less cost and risk to the plans being developed by the airport’s owners. We raised funding to enable the necessary technical work to be undertaken. In the end it seems Heathrow Airport Ltd, a company owned by a large Spanish owned construction company together with a number of sovereign funds, decided that its costly proposition was the one to go for – perhaps reflecting the perverse regulatory incentives which deliver the owners a financial return for every pound invested.
Lessons learned
So, what have I learnt from the four challenges that I have described here?
Firstly, the need to have heavyweight political support, a particular issue today as there are, in my opinion, no Heseltines and Prescotts in the current generation of politicians.
Secondly, the Department for Transport has no capabilities for properly determining project viability. HS2 is the obvious example. A project which started life as a 400km/h railway has ended up with the primary objective to increase capacity but with no intermediate links in its phase 1 to the existing or proposed railway networks. It is quite clear that there has been inadequate forecasting of HS2 costs and benefits and it would appear costs are continuing to escalate leading to the project value being non-existent.
Thirdly, the government has yet to define the role of the private sector in new rail infrastructure which means that procurement is done inefficiently by the public sector. The levels of governance are horrific and inefficient as Crossrail has demonstrated and HS2 is expected to follow suit. Had Crossrail and HS2 been procured using the CTRL model, I would expect there to be substantial savings in costs – maybe 30% – with the prospect of certainty on time delivery.
Fourthly, government delivery models create excellent opportunities for consultants of all types to earn substantial sums without delivering worthwhile outputs – HS2 seems a good example of this.
Finally, I think the role of the professional engineer is being diminished but I am hesitant in saying this because many of the problems of HS2 in its early stage of development seem to have derived from engineers working in isolation from the other skills – and common sense.
I have to end by mentioning two further opportunities in which I have been involved. Entering London proper has been an issue for HS2 as has its failure to link with HS1, as well as its bizarre decision to follow the Victorian approach to terminal stations in cities rather than the European success of through running. Nowhere else would plan terminal stations today, and indeed European cities are steadily turning theirs into through stations so why Euston, particularly when HS2 is entirely dependent on Crossrail 2 for passenger dispersal? With others I have been involved in examining a private sector initiative to design, build, operate and manage a new railway line linking Old Oak Common with HS1 in the Rainham area. This would include a new underground station in the Waterloo area and a further one in east London. This would mean that the high cost and very risky Euston station and tunnel would be abandoned. The proposition would complete the spine railway linking the north with the south and both with Europe for passengers and goods. I could get no traction with government or No 10. HS2 became a political torpedo when prime minister Boris Johnson announced last February that the HS2, with its terminal London station at Euston, would proceed. My Cross City Connect proposition would reduce the HS2 costs and risks and improve the projects value for money. Clearly, I could not promote this proposition in the private sector without a nod from whoever in Government that they would give consideration to a private sector project. So that was dead in the water, as was the Heathrow Hub proposals. There is a total failure in the Department for Transport to engage with the private sector.
But all is not yet lost. Our work on Heathrow Hub clearly indicated a need for a rail connection linking London/Heathrow and the southwest. Heathrow Southern Railway has developed and costed a private sector venture to design, build, operate and own a new railway line linking the South Western rail network with Heathrow, with services extended to Paddington using the existing underused Heathrow Express train paths on the Great Western Main Line, giving a direct connection to Crossrail and relieving the South West Main Line into Waterloo. Serving both airport and non-airport markets, together with its relatively low capital cost, results in a highly attractive business case, and the project needs only a usage agreement before it can proceed. This is a fine example of a privately financed venture which I would have thought government would wish to see go forward, not least because it would reduce the environmental impacts of Heathrow’s surface access. We are anxiously waiting for the Department for Transport to give it the go ahead, despite Network Rail pausing the project, with a usage agreement on similar terms to those which HS1 Ltd were able to negotiate some years ago.
To end, these are my strictly personal experiences, and I remember back in the 1990s a senior member of the Department for Transport said to me: “Well, you have won this one (CTRL/HS1) against us but you will never succeed again.” Sadly, it looks like they were right!
- Mark Bostock is former director with Arup
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