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A high speed world needs political consensus

In the past fortnight there has been a surge in chatter about the prospects of mega-transport schemes High Speed 2 (HS2) and the Thames Estuary airport. But still the government faces the question of how to fund these projects while keeping taxpayers happy or, alternatively, how to entice a risk-averse private sector to get on board.

The case for HS2 is gathering pace. Earlier this month the government set out its third — and what it hopes will be decisive — route plan for
the first phase from London to the West Midlands. It also promised further route development for the Y network to Manchester and Leeds by March.

With a medley of mitigation solutions proff ered to Chilterns’ dwellers, transport secretary Justine Greening hopes that the naysayers will fall in line with her claim that HS2 is vital for economic development and capacity.

There is no [political] consensus with airport expansion

David Leam, London First

At the same time, London mayor Boris Johnson’s favoured future airport proposition for the Thames Estuary no longer appears quite as fantastical as it once was with the government progressing the project by enabling a consultation to go ahead this spring.

So, are we looking at a new, positive era for major transport schemes? While high level recognition of the issue of transport capacity in the decades ahead is welcome, there are major issues that must be overcome.

HS2 is a good case study by which to measure how easily a major transport scheme can be built in the UK. “The great success of HS2 so far is that it has had cross-party consensus,” says business lobby group London First executive director, policy David Leam. “There is no such consensus with airport expansion.”

Thames Estuary airport is politically unpopular, so would be a very difficult thing to do.” To illustrate this point, a debate in the House of Commons last week heard vehement opposition from local Tory MPs. Rochester and Strood MP Mark Reckless called the Halcrow/Foster developed multimode Thames Hub scheme, which includes new passenger and freight rail connections, “absolutely preposterous”, while Thurrok MP Jackie Doyle-Price said it was “pie in the sky”.

Leam says that, along with legislative obstacles, each major political party holds a differing view of the Thames Hub project. And, vitally important, and yet severely lacking, is any government discussion about the associated transport infrastructure to make this new airport work.

“It is interesting that the government is now acknowledging the capacity problem of the South East’s airports,” says transport planner Steer Davies Gleeve non-executive director Jim Steer. He adds that, while there would be spare capacity serving an estuary airport to the continent via High Speed 1 (HS1), there is too little that could serve London.

A plan such as the Thames Hub would be “perfectly sensible”, says Steer, but an assumption of a passenger connection to HS2 (in the event it goes ahead) would suff er from the fact that “HS2 will be full before a Thames Estuary airport is built”.

Rather, a third high speed line along the eastern corridor of the country would be vital, he says. Beyond the political debate, resolving policy on funding and stimulating finance should be a high priority. HS2 seems safe — the frugal coalition government has been persuaded that putting up £32.7bn is a good investment.

HS2 will be full before a Thames Estuary airport is built

Jim Steer, Steer Davies Gleave

Which is just as well, because there has recently been a distinct lack of evidence of the potential for leveraging in private finance — something the Conservatives had previously claimed could meet 20% of the costs (NCE 25 February 2010).

It is no wonder that all has gone quiet on this front because, ultimately, the public sector is the only place where the risks of failing to deliver the economic goods will sit. This is because the public sector is happier to take a 20 to 30 year view, says Leam.

When it comes to a new estuary airport, he adds, the airlines are saying they would need a good reason to go there, as illustrated by the decision to build Terminal 5 at Heathrow for BA aircraft. “If BA was presented with a shiny new facility [on the Thames Estuary], perhaps they could do a deal, but they’re just not there yet,” he says.

More viable, if unpopular, would be the Heathrow third runway, agree Steer and Leam. Heathrow’s third runway would require zero contribution from the taxpayers and deliver greater capacity, says Leam. “I can’t see how you would get a Thames Estuary airport funded or financed by the private sector.”

The Northern Line Extension (NLE) to Battersea and Nine Elms in south London provides a warning on relying on mixing public and private funding for a major transport project. The now £850M to £900M scheme involved a vital £200M contribution from Battersea Power Station developer Treasury Holdings, which ran into financial difficulties late last year. “The NLE is only going to become a reality when there is a developer solvent enough to be a supporter,” says Leam. The extension, and the regeneration it is supposed to unlock, “has potential and scope”, he says, “but it is highly uncertain when the gains will materialise”.

What is clear is that political will is the overriding factor formajor transport projects to be pushed through. It remains to be seen if further high speed rail or airport expansion projects will receive enough high level supportto secure their future.

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