Taxpayers "saddled with £4.8bn Channel Tunnel debt"

Taxpayers have been left “saddled with £4.8bn of debt” after over-optimistic predictions were made for the usage of the HS1 Channel Tunnel rail link.

“Unrealistic estimates” were made for the London to Folkestone HS1 route and should not be repeated when the business case is put together for HS2 between Birmingham and the capital, according to a report by MPs.

The House of Commons Public Accounts Committee believes taxpayer support for the HS1 route over the period to 2070 is likely to reach £10.2bn.

The number of international passengers travelling on HS1 is only a third of the original estimate in 1995, and two-thirds of the Department for Transport’s (DfT) forecast in 1998, the committee found.

“Over-optimistic and unrealised forecasts for passenger demand on HS1 left the taxpayer saddled with £4.8bn of debt,” the report said.

Margaret Hodge, the Public Accounts Committee chairman, said: “While HS1 provides an efficient service, contributing in an important way to British transport infrastructure, there were costly mistakes in the history of the project. These must not be repeated with HS2.

“HS1 was supposed to pay for itself but instead the taxpayer has had to pay out £4.8 billion so far to cover the debt on the project.”

A spokesman for the DfT said HS1 was a “successful and central part” of the country’s transport infrastructure.

The DfT spokesman added: “It was delivered on time and on budget and this report commends the ‘exemplary’ way the sale of the line was handled – generating more than £2bn for the taxpayer, far exceeding market expectations.”

He continued: “Our passenger forecast modelling has improved significantly since the original work for HS1 over 20 years ago, with better understanding of what drives passenger demand, better computer modelling and more computer power to do it.

“Network Rail predicts the West Coast Main Line will be full by the mid-2020s and HS2 presents the most effective solution to this looming capacity crunch facing our rail network. This is in addition to the jobs, regional regeneration and improved connectivity the project will deliver.”

Transport watchdog London TravelWatch said:”These figures do not particularly surprise us as plans for HS1 were based on pre-recession assumptions about the growth of house building along the route at places like Ebbsfleet and also more transfer of existing passengers from main line Southeastern services.

“But this has not occurred due to the higher fares on HS1 and the retention of far more ‘classic’ services than was envisaged when HS1 was planned. These sorts of issues will need to be taken into account during the planning process for HS2.”