Heathrow expansion vs high-speed rail

The Conservative Party has proposed an alternative to the £9 billion expansion of Heathrow. A high-speed rail line would be constructed along the route London-Birmingham-Manchester-Leeds to reduce pressure on the airport by lowering demand for domestic flights.

Yet there is a fundamental economic difference between the two options. Whereas Heathrow’s third runway will be privately funded by the airport’s owners, the high-speed line will be funded by taxpayers.

Its estimated cost is £20 billion. But given the history of big government projects and the fact that extensive tunnelling will be required – probably in the cities and certainly under the Pennines – £30 billion plus seems like a more realistic estimate.

It will be impossible for fares to cover the capital costs. On current figures, this would require the allocation of more or less all the passenger revenue from the UK’s entire inter-city rail network. In reality, of course, most railways struggle to cover even their running costs with ticket sales and require additional operating subsidies.

High-speed rail also offers poor value compared with roads. £30 billion would perhaps buy 1,000 miles of motorway, which, if sensibly located, could be expected to carry more passengers and freight than the entire rail network. And the funding could be entirely private, paid for by tolls, particularly if competing routes were also priced.

Finally, the environmental case for high-speed rail is greatly exaggerated. Running at 180 mph uses far more energy than at conventional speeds and the saving compared with air travel is likely to be small. While electric trains can be powered using renewable energy or nuclear power (hence the claims of low carbon emissions), given the limited capacity of such generation the additional demand created will almost certainly require extra fossil-fuel consumption to supply existing customers.

Exactly. I did a post on this very topic recently, and it appears (within a margin of error) that, even assuming that CO2 emissions are that important, that the ‘full cost’ CO2 per passenger-mile is much the same for car, plane and train (or possibly even walking, by some accounts), once you take the CO2 emissions caused by smelting the steel or aluminium for vehicles and sleepers, and the CO2 emitted by generating electricity to power trains and station lighting etc.The fact that Heathrow will be privately funded is icing on the cake. The cost of road building and maintenance can be covered by fuel duties, that’s less faff that toll roads.Here endeth.

£30 billion wouldn’t buy 1000 miles of motorway. This assumes a cost of building a motorway of £3m per mile. Leaving aside the fact that the M1 widening is costing £21m per mile, the £3m/mile figure doesn’t include land purchase nor the cost of re-routing other road systems to connect to (or avoid) new motorways.We wouldn’t get more than 200 miles of motorway for £30bn and why do railways need tunnelling whereas motorways wouldn’t?You compare the cost of railway with that of the expansion of Heathrow. This doesn’t take total costs into account – planes cost a lot more than trains. Aviation fuel is also untaxed, which artificially makes air travel cheaper.

HJ – I think you have got your sums wrong. I make it £30 million per mile. This is a pretty realistic estimate. Widening a motorway by one lane in each direction costs roughly the same as building a brand new six-lane motorway.If you go to the Highways Agency website you will find the costs of some recent motorway building contracts for the A1 upgrade in North Yorkshire (which involved building completely new stretches of six-lane motorway). I believe these schemes actually cost much less than £30 million per mile.By the way, railways require tunnelling because trains, unlike road vehicles, can’t cope with steep gradients.

The significance of “high-speed” in “high-speed rail” is less than meets the eye, as journeys by rail involve getting to and from rail stations, and waiting in them. For many journeys, buses on motorways offer superior door-to-door service at lower costs.One reason railway costs are high is that their track is dedicated to rail trains, which need miles of empty right-of-way between them. On the other hand, the spaces between buses on motorways can accommodate other vehicles which, if fee-paying, can cover substantial proportions of motorway costs.

Is the picture changed when external costs are included? There may be some costs to communities on the way to Manchester but what of the noise/pollution, social and housing costs around London?Has anyone examined the savings in journeys from the provinces into London, which could be shortened into journeys to Manchester? Perhaps Birmingham is even more central?

Richard,Yes, elementary division error.I disagree with you about tunnelling. Whilst it is true that trains can’t cope with steep gradients, the most expensive part is tunnelling to get lines into cities. How are you going to get cars to these new motorways of yours? You either create more congestion on roads connecting to motorways, or you’ll have to tunnel the motorways in.I am not saying that trains are a necessarily better substitute (in fact I disapprove of rail subsidies), but I am saying that we should look at all the costs for other alternatives, otherwise we can’t make a fair comparison. John Trudgill’s point about external costs is also a good one.

John – unfortunately it is very tricky to calculate the external costs of such projects. If we had a free land market then noise and local air pollution could be fully internalised and priced. Of course this already happens to some degree. Property buyers near Heathrow will have paid less to reflect current pollution levels as well as future risks of additional devaluation due to airport expansion.In comparing the two options it is important to remember that a) levels of pollution in West London are likely to continue declining in the long run and b) that the ‘deadweight’ losses from taxes to fund the high-speed route would far exceed the external costs of both projects put together.

HJ – in the cases of Birmingham, Manchester and Leeds it may be possible to use existing rail corridors for the high-speed line, avoiding the need for tunnelling. London could be more problematic, given its high rail traffic volumes. Very long and expensive tunnels will certainly be needed under the Pennines.The economic case for urban motorways is probably weak in most cases (given the huge costs). Rather than tunnel in to city centres it makes more sense for economic activity to move out of congested inner cities to out-of-town locations. In many cases the new motorways would take traffic from existing ‘A’ roads with enormous benefits for safety as well as congestion.

Richard,I agree with you about urban motorways. However, if economic activity moves out of inner cities to out-of-town locations, this will increase traffic (and transport costs) because people then have to travel further to work. Eventually we end up with a low density urban/industrial sprawl with high traffic levels. Denser cities reduce the need for transport.Neither am I convinced that motorways relieve ‘A’ roads – have you any evidence that this is the case? I suspect that they just create more traffic as it becomes more feasible to commute further. Perhaps a better solution would be to remove stamp duty on house sales, which is simply a tax on moving closer to where you work.

HJ – if congestion is avoided and faster speeds attained then moving out-of-town can reduce transport costs. Denser cities have both advantages and disadvantages which vary according to the preferences of different households and businesses. But strict planning controls and the Soviet-style provision of transport infrastructure mean that people and firms don’t have the choice to locate in the most efficient location. You’re right that in places where demand far outstrips the supply of road space then ‘A’ roads are likely to fill up again. But such ‘induced’ traffic isn’t necessarily a bad thing – it can be a sign of increased economic activity. And longer-distance commutes enable a wider choice in both employment and housing. For example, many more can enjoy the benefits of living in rural areas.

Exactly. I did a post on this very topic recently, and it appears (within a margin of error) that, even assuming that CO2 emissions are that important, that the ‘full cost’ CO2 per passenger-mile is much the same for car, plane and train (or possibly even walking, by some accounts), once you take the CO2 emissions caused by smelting the steel or aluminium for vehicles and sleepers, and the CO2 emitted by generating electricity to power trains and station lighting etc.The fact that Heathrow will be privately funded is icing on the cake. The cost of road building and maintenance can be covered by fuel duties, that’s less faff that toll roads.Here endeth.

£30 billion wouldn’t buy 1000 miles of motorway. This assumes a cost of building a motorway of £3m per mile. Leaving aside the fact that the M1 widening is costing £21m per mile, the £3m/mile figure doesn’t include land purchase nor the cost of re-routing other road systems to connect to (or avoid) new motorways.We wouldn’t get more than 200 miles of motorway for £30bn and why do railways need tunnelling whereas motorways wouldn’t?You compare the cost of railway with that of the expansion of Heathrow. This doesn’t take total costs into account – planes cost a lot more than trains. Aviation fuel is also untaxed, which artificially makes air travel cheaper.

HJ – I think you have got your sums wrong. I make it £30 million per mile. This is a pretty realistic estimate. Widening a motorway by one lane in each direction costs roughly the same as building a brand new six-lane motorway.If you go to the Highways Agency website you will find the costs of some recent motorway building contracts for the A1 upgrade in North Yorkshire (which involved building completely new stretches of six-lane motorway). I believe these schemes actually cost much less than £30 million per mile.By the way, railways require tunnelling because trains, unlike road vehicles, can’t cope with steep gradients.

The significance of “high-speed” in “high-speed rail” is less than meets the eye, as journeys by rail involve getting to and from rail stations, and waiting in them. For many journeys, buses on motorways offer superior door-to-door service at lower costs.One reason railway costs are high is that their track is dedicated to rail trains, which need miles of empty right-of-way between them. On the other hand, the spaces between buses on motorways can accommodate other vehicles which, if fee-paying, can cover substantial proportions of motorway costs.

Is the picture changed when external costs are included? There may be some costs to communities on the way to Manchester but what of the noise/pollution, social and housing costs around London?Has anyone examined the savings in journeys from the provinces into London, which could be shortened into journeys to Manchester? Perhaps Birmingham is even more central?

Richard,Yes, elementary division error.I disagree with you about tunnelling. Whilst it is true that trains can’t cope with steep gradients, the most expensive part is tunnelling to get lines into cities. How are you going to get cars to these new motorways of yours? You either create more congestion on roads connecting to motorways, or you’ll have to tunnel the motorways in.I am not saying that trains are a necessarily better substitute (in fact I disapprove of rail subsidies), but I am saying that we should look at all the costs for other alternatives, otherwise we can’t make a fair comparison. John Trudgill’s point about external costs is also a good one.

John – unfortunately it is very tricky to calculate the external costs of such projects. If we had a free land market then noise and local air pollution could be fully internalised and priced. Of course this already happens to some degree. Property buyers near Heathrow will have paid less to reflect current pollution levels as well as future risks of additional devaluation due to airport expansion.In comparing the two options it is important to remember that a) levels of pollution in West London are likely to continue declining in the long run and b) that the ‘deadweight’ losses from taxes to fund the high-speed route would far exceed the external costs of both projects put together.

HJ – in the cases of Birmingham, Manchester and Leeds it may be possible to use existing rail corridors for the high-speed line, avoiding the need for tunnelling. London could be more problematic, given its high rail traffic volumes. Very long and expensive tunnels will certainly be needed under the Pennines.The economic case for urban motorways is probably weak in most cases (given the huge costs). Rather than tunnel in to city centres it makes more sense for economic activity to move out of congested inner cities to out-of-town locations. In many cases the new motorways would take traffic from existing ‘A’ roads with enormous benefits for safety as well as congestion.

Richard,I agree with you about urban motorways. However, if economic activity moves out of inner cities to out-of-town locations, this will increase traffic (and transport costs) because people then have to travel further to work. Eventually we end up with a low density urban/industrial sprawl with high traffic levels. Denser cities reduce the need for transport.Neither am I convinced that motorways relieve ‘A’ roads – have you any evidence that this is the case? I suspect that they just create more traffic as it becomes more feasible to commute further. Perhaps a better solution would be to remove stamp duty on house sales, which is simply a tax on moving closer to where you work.

HJ – if congestion is avoided and faster speeds attained then moving out-of-town can reduce transport costs. Denser cities have both advantages and disadvantages which vary according to the preferences of different households and businesses. But strict planning controls and the Soviet-style provision of transport infrastructure mean that people and firms don’t have the choice to locate in the most efficient location. You’re right that in places where demand far outstrips the supply of road space then ‘A’ roads are likely to fill up again. But such ‘induced’ traffic isn’t necessarily a bad thing – it can be a sign of increased economic activity. And longer-distance commutes enable a wider choice in both employment and housing. For example, many more can enjoy the benefits of living in rural areas.

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