Let the private sector make HS2 a success

Discussions surrounding the UK’s “stop-start” infrastructure development took centre stage at the first Construction News Summit last week.

With Andrew Wolstenholme, CEO of Crossrail, and Douglas Oakervee, Chairman of High Speed 2 (HS2) Limited, both speaking at the event, the two mega-projects were always likely to be at the heart of the debate.

Glenigan economist Tom Crane, who attended the CN Summit in London on 24 October, takes a closer look at recent rail schemes making the headlines and the main infrastructure issues raised at the event.

Political challenges

With their impact on transport and the economy, major infrastructure projects are usually accompanied by high profile political wrangling and none more so than the long-delayed Crossrail development. 

The scheme was initially recommended by the Central London Rail Study in 1989 to address the overcrowding on London trains. It was agreed by the then Conservative government in 1990, but the necessary Private Bill failed to get through the House of Commons.

Commenting on internal disputes between government departments at the CN Summit, Former Chancellor of the Exchequer Alistair Darling claimed Crossrail only got approved when he, then Secretary of State for Transport, put forward the proposal and was appointed Chancellor in time to approve it.

Douglas Oakervee, yet to bring a Hybrid Bill before Parliament to approve the HS2 rail network , was more understated, saying: “It’s always difficult to get political alignment.”

Shadow Chancellor Ed Balls’ recent criticisms of the project, alongside the fact that the route runs through many rural Conservative constituencies, threatens to turn HS2 into the latest political football.

High Speed 2

Questions of the impact of HS2 have been focused on the north-south divide and whether business will travel up the line to Birmingham, or flow the other way to the ever more dominant London. However these analyses have missed some important factors. Economic growth is not a zero-sum game; what is good for London can be good for Birmingham, Leeds and Manchester too. Secondly they overlook the importance of good transport connections for attracting investment and development.

The capital has seen how new transport links can lead to complete redevelopment, with Stratford continuing to benefit from improved connections following the 2012 Olympics. An equally remarkable development is the transformation of a 67-acre site at King’s Cross, which includes a new campus for the Central St Martin’s College of Art and Design and 3.4 million sq ft of workspace, including Google’s £300 million new UK headquarters (Project ID: 10394495).

Speaking at the CN Summit, David Partridge, Managing Partner of site developers Argent, attributed the feasibility of such a major development to the hub capacity of the King’s Cross and St Pancras stations. These stations are connected to six London Underground lines, Europe and the South East by High Speed 1 and are within an hour of the city’s five international airports.

Partridge believes that given the certainty of HS2, cities can begin to plan redevelopment and attract investment to maximise the benefits when it arrives. However some argue that the transformative effects enjoyed by Stratford and King’s Cross can be solely attributed to their location within London.

Regional investment

It is true that infrastructure spending is not a development panacea. Ebbsfleet International Station in Kent opened in 2007 as part of the high speed line to the Channel Tunnel, intended to boost development of a whole new town which subsequently failed to materialise.

However, Birmingham, Leeds and Manchester are all major, vibrant cities that are already attracting large scale private investment. Argent is currently working on Manchester’s ‘Airport City’ (Project ID: 12018567) and the Paradise Circus (Project ID: 01431464) regeneration scheme in Birmingham, while Hammerson has invited tenders for a £600million shop and office development in Leeds.

Despite being billed as high speed, the main benefit of HS2 is that it will increase capacity and free up regional routes. Firms want to move where they can attract the best staff, so better capacity for commuters from around these cities will encourage businesses to relocate or expand.

The timescale of HS2, with the second phase not expected to open to passengers until 2033, means that it is impossible to predict its precise impact. However it does enable the government to provide certainty of improvements to our rail infrastructure over the next 20 years – and this certainty is exactly what the private sector needs.

To find out more about HS2 and other major infrastructure developments, speak to Tom Crane on 0800 373 771 or email tom.crane@glenigan-old.thrv.uk

Do you think HS2 will benefit the whole of the UK or cause our economy to become even more London-centric? Get involved in the debate on the Glenigan Twitter page (@Glenigan) or join our Construction Project Intelligence group on LinkedIn.