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Sunak private funding plan for HS2-Euston set to fail top adviser warns

HS2 will not reach central London unless the Government finds the billions of pounds needed to build the tunnel linking the troubled rail link to Euston, according to the Government’s infrastructure chief.

Richi Sunak insisted HS2 would run from Euston station in central London when he cancelled the Birmingham to Manchester leg of the high speed line last month because of spiralling costs.

The Prime Minister said the link from HS2’s current terminus at Old Oak station in north-west London to Euston station would go ahead financed by private developers who would contribute the estimated £6.5bn cost of the final stretch of track to Euston in return for profits gained from developing the valuable land around the central London station.

But Sir John Armitt, chair of the National Infrastructure Commission which advises the Government on major building projects, said developers would not fund the tunnel needed to connect Euston to Old Oak Common. “You’ve still got to dig 4.5 miles of tunnel and that won’t be paid for by the private sector,” he told the Financial Times.

“At the end of the day the Government will need to be ready to fund the core civil engineering for the final miles of the project,” he said.

Sir John Armitt, ICE President briefs press on the press meeting at Zero Carbon Building, Kowloon Bay. 15JAN16 SCMP/Edward Wong (Photo by Edward Wong/South China Morning Post via Getty Images)
Sir John Armitt, chair of the UK’s iInfrastructure Commission (Photo: Edward Wong /SCMP)

He said that if HS2 did not reach Euston, it would require changes to plans at Old Oak Common and would put pressure on the Elizabeth Tube Line onto which HS2 passengers would need to transfer in order to finally reach central London.

“Ultimately HS2 needs to get all the way into Euston to ensure the scheme is attractive to passengers and doesn’t place huge burdens on the Elizabeth Line,” he said.

Sir John’s scepticism over the likelihood of private sector funding to finish the project in central London calls into question the Department of Transport’s belief a private sector deal can be sealed.

Rail Minister Huw Merriman told MPs: “We are going to scale back the project at Euston and adopt a new development led approach to the Euston Quarter which will deliver a station that works, is affordable and can be open and running trains as soon as possible.

“We will not provide design features we do not need, and will instead deliver a 6-platform station which can accommodate the trains we will run to Birmingham and onwards and which best supports regeneration of the local area. In this way we will attract private funding and unlock the wider land development opportunities the new station offers, while radically reducing its costs to the taxpayer.”

“At Euston, we will appoint a development company, separate from HS2 Ltd, to manage the delivery of this project. We will also take on the lessons of success stories such as Battersea Power Station and Nine Elms, which secured £9bn of private sector investment and thousands of homes.”

Ministers have warned the rail link may not reach central London until 2040.

Transport Secretary Mark Harper told MPs on the parliamentary transport select committee that he was very confident HS2 would terminate at the centre of the capital rather than stop at Old Oak Common station. He said there had already been “significant interest” from the private sector about transforming the “Euston quarter” but acknowledged Ministers would have to look again if no private developers came forward.

Mr Harper said the Government had attracted £9bn of private sector funding when in 2021 it extended the Northern Line underground service an additional 3kms to Nine Elms and Battersea Power Station in south-west London. “That’s a good indication of what’s possible [at Euston],” he said.

Sir John Armitt called into question the Minister’s optimism pointing out that most of the private investment at Battersea “was for real estate investment, rather than for the new Northern Line connection”.

Sadiq Khan, London’s Mayor, has also expressed doubt on the likelidhood of private funding for the rail link to Euston. Private funders “have been spooked” by the Government’s decisions on HS2 he said. “Metaphorically, they’ve got their heads in their hands because of the uncertainty. The idea that the private sector is going to put billions into a project, not knowing what is round the corner, what other U-turns might come, is not realistic,” he said.

There was “not a cat in hell’s chance,” Mayor Khan said, that private investment would cover the estimated £6.5bn cost of the scheme, including the tunnelling needed to link Euston to Old Oak Common – currently designated the “temporary” HS2 terminus – plus pedestrian links from Euston to Euston Square and wider local amenity improvement.

A Department of Transport spokesperson said: “As has always been the case, the line will finish at Euston. The new plan for Euston represents a world class regeneration opportunity that offers greater value for money for taxpayers. Our approach has been successfully carried out recently – including in regenerating Battersea Power Station and Kings Cross – and there has already been significant interest from the private sector to invest.”

The government has appointed Lord Hendy of Richmond Hill, to head the Euston Partnership responsible for developing the station and the surrounding area, He said it was a real opportunity to transform Euston quarter. “I am sure the partners will work collaboratively with the Government to work through the financial and other mechanisms to make this work.”

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