Can Chinese expertise help Britain’s future high-speed railway rival Japan’s bullet trains?
Hong Kong’s MTR and China’s Guangshen Railway Company are said to be front runners to operate trains on a new train network in Britain
It’s Britain’s most ambitious transport project since motorways were built in the 1950s: a rail network that could be on par with Japan’s bullet trains when it comes punctuality and speed.
The first phase of the High Speed 2 network, which is expected to be operational by 2026, will link London to Birmingham with 1,000-seat, 400-metre-long trains.
The second phase will fan north to Manchester, Sheffield and Leeds, with trains cutting through the British heartland at speeds up to 400km/h.
“Our ambition is for HS2 to achieve world-class levels of reliability, on a par with Japan’s Shinkansen high-speed rail network,” HS2 Ltd, the firm building the railway, said last week. “HS2 will be a railway that can be depended on seven days a week.”
It was a bold pledge given Japan’s reputation for its rail expertise and because major construction on the £56 billion (HK$577 billion) project hasn’t started yet, despite years of planning.
Supporters say HS2 will be pivotal in developing the economy of post-industrial England, with 100,000 jobs created just to build it.
But critics say it is not needed and could actually suck resources south to London. And when it was reported in Britain last month that MTR Corp and China’s Guangshen Railway Company were the front runners to win the tender to operate the HS2 trains, there were some concerns.
The winner will not be announced until next Spring and the DfT has declined to comment about how much the franchise will cost.
Joe Rukin, campaign manager for the Stop HS2 movement, said the British government was trying to “con” the Chinese.
“They are hoping the Chinese government is naive to the realities of HS2 and could con them into paying over the odds for something that will never live up to its hype,” he said. “Everyone here knows it is a gigantic white elephant.”
MTR is a publicly-listed company responsible for Hong Kong’s subway system and a property developer. It has already been in the driving seat of two of Britain’s most innovative railway investments and other overseas projects.
MTR was the first operator of the London Overground line between 2007 and 2016 that serves large parts of the city’s east and south that are not served by the Underground.
In 2014 MTR won the £1.4 billion contract to run the new Crossrail that will connect the home counties through London. It is due to go into operation at the end of the year.
The Department for Transport declined to comment on the HS2 tender, but The Times last month quoted “a senior rail source” as saying internal problems at two other bidding companies “could let in the Chinese as they have deep, state-backed pockets and would have a blank cheque”.
The Chinese consortium, with Guangshen Railway Company bringing the high-speed expertise, is one of three joint ventures shortlisted for HS2 and the final bids are due in this month.
The other competitors are household brands in Britain.
Virgin Trains, operators of the West Coast Railway which is part of the HS2 network, has teamed up with Stagecoach and France’s state-run rail company SNCF.
However, Stagecoach and Virgin recently abandoned a railway service in the east of England because it did not meet revenue expectations due to unreliable passenger projections.
The other bidder is a joint venture between First Group and Italy’s Trenitalia. But First Group posted a £326 million financial loss last year causing its chief executive to resign.
Sold as a package, the contract includes the HS2 line and West Coast main line from 2019.
A change in the leadership of HS2, announced this month could also help MTR’s chances of winning the bid.
Terry Morgan, current chairman of Crossrail, has been chosen as the new chairman of the second stage of HS2 project. He will stay at Crossrail at the same time.
“Terry’s appointment as chair of HS2 ensures that we will continue to see world-class leadership in an exciting period for one of Europe’s most significant infrastructure projects, helping deliver huge economic growth and improvements for passengers across the country,” Transport Secretary Chris Grayling said when announcing the appointment.
Others are sceptical of the whole project. Transport analyst Richard Wellings from the Institute of Economic Affairs think tank said the business model provided by HS2 is unrealistic.
“The assumptions used are hugely off the mark because you are looking at decades in the future. There is a danger the operators are over-optimistic when they make the bid regarding passenger growth.”
With construction yet to start, anti-HS2 campaigners are still hoping to derail the project. But the government, which has already invested so much in HS2, may be eager to create new jobs to offset losses expected after the UK leaves the European Union next year.
And even if China’s bid is accepted, the deal may be short-lived. A popular policy of opposition Labour leader Jeremy Corbyn is renationalising the country’s railways and if he wins the next general election, it could be all change for HS2 and its Chinese partners.