Comment: Go-ahead for Euston link?

Revival of the HS2 city terminus could be tied in with station improvements, says our anonymous Industry Insider columnist

Top officials at the Department for Transport have been successful in persuading HM Treasury that it makes no sense to terminate HS2 at Old Oak Common, and that the extension to Euston (on which work has been paused) should be authorised. This is expected to be announced in the autumn budget on October 30.

A debate continues about funding options, and a degree of private sector investment is likely to be used to ease concerns about further taxpayer funding.

The business case has been improved by combining the rail link with the benefit of redeveloping Euston station, where overcrowding has caused London TravelWatch to raise safety concerns. This has resulted in a short-term improvement plan to increase space on the concourse and to improve passenger information.

A revamp provides an opportunity to add space for station retailing, which has been proved to bring rising rental income at stations such as Waterloo, King’s Cross and St Pancras, where outlets have traded successfully.

This is supported by increased footfall, given that passenger numbers have more than doubled over two decades. And despite the trend of working from home, the number of current users of the national network grew by 8% between April and June, compared with the corresponding period in 2023.

At 420 million trips, that total is 96% of the pre-COVID level. And there is no indication that post-COVID growth will abate, or that past longer-term projections of 2.5% annual growth for planning purposes will be invalid.

For station trading, figures released by Network Rail on September 24 showed that in the quarter between April and June, retailers at NR’s 19 managed stations recorded sales of £226 million, representing 10% year-on-year growth.

As a comparator, the British Retail Consortium recorded a 1.1% sales decline, highlighting the resilience of station retailing.

Growth at NR stations was headed by a 39% increase at London Waterloo, where new and upgraded retail units that include M&S and Monsoon (a clothing boutique) have been let.

For those unfamiliar with the changes at Waterloo, a balcony overlooking the concourse has enabled retail units to extend back into the area formerly occupied by the general offices.

And retail sales growth is not confined to London stations, with Liverpool Lime Street, Glasgow Central, Reading and Bristol Temple Meads recording a significant uplift.

At Euston, station activity is constrained by a 1960s terminal design where the expectation of developing retail beyond a bar, cafeteria, and newsstand was not anticipated.

Retail units have been added, but they have created a clutter within the concourse. This adds to congestion and an unsightly collection of what must be seen as temporary buildings in front of the entrance.

There are potential benefits from future high-speed train services, but without an extension to Euston, the interchange at Old Oak Common will have a detrimental effect on Great Western Main Line services, which will be required to make an additional call (thus extending journey time).

As it is, disruption as a result of construction will reduce the number of existing running lines from four to two, which will have an impact on train frequency to/from Paddington that includes GWML and suburban services as well as the Elizabeth line.

As a mitigation, trains are to be diverted to Euston using available bi-mode rolling stock. A diversionary route is also available from the West Country to London using the former Southern main line between Exeter and Waterloo, although capacity is heavily constrained as a result of lengthy sections of single-line running.

There has been stakeholder pressure to restore double track to allow a higher frequency of local trains serving Exeter, and new demands on the route should make this a greater investment priority.

As well as restarting work on the link to Euston, there is an expectation that the budget will also contain a decision to proceed with the new Northern Powerhouse Rail route between Liverpool and Manchester that will serve Warrington and Manchester Airport.

A positive decision will be an important element of the newly proposed Midlands-North West Rail Link (MNWRL).

There is widespread dismay among policy makers outside London that following the cancellation of HS2 Phase 2a, which provided a high-speed route between Birmingham and Crewe, sub-standard connectivity will continue between the West Midlands and North West conurbations, resulting in detrimental economic performance.

Promoted by the West Midlands and Greater Manchester elected mayors, it is an alternative and cheaper option to Phase 2a as maximum speed is restricted to 186mph (RAIL 1019). This allows conventional ballasted track to be used, while resulting in only a marginal change from the previous proposed journey times.

The plan is split into what is described as the Staffordshire Connector, which broadly makes use of what was proposed for the HS2 route with a connection to the end of the high-speed line as now proposed at Fradley, running to join the West Coast Main Line at Crewe South. A Cheshire Connector runs from Crewe to join the new NPR high-speed line between Warrington and Manchester Airport.

As a starting point, the government is being urged not to compromise the HS2 alignment where Parliamentary powers exist for construction of the line, to allow time for the MNWRL to be developed into a business case and for private sector funding options to be explored.

The government is also conducting a review to understand why major projects such as HS2 and nuclear power stations have seen an exponential increase in predicted costs (which in the case of HS2 has wrecked the project). Research by the campaign group Britain Remade has shown that these costs are much greater than in other developed countries.

A restructuring of the quangos with responsibility for public sector investment is to take place, with the National Infrastructure Commission and Infrastructure Projects Authority being merged to create an organisation to monitor progress with taxpayer-funded major projects.

With HS2, where costs escalated from £38 billion to an expected outturn of close to £100bn for the reduced route between Old Oak Common and Birmingham Curzon Street, reasons have not been explained.

But with the benefit of hindsight, why was it thought that running at greater speeds than 186mph would have a financial return, given the escalation of the build cost that resulted?