Fast Track Scotland - Making the Case for High Speed Rail Connections with Scotland
6. Value for Money
Section 4 clearly shows that there are significant economic and environmental benefits provided by a high speed rail link to Scotland. DfT (2007) acknowledges this, arguing that the inclusion of Scotland in the UK high speed rail network is essential for the project to achieve significant reductions in UK carbon emissions. The significance and importance of including a high speed rail link to Scotland is also highlighted by Greengauge 21 (2009a), with their analysis showing that the section between Manchester and Scotland provides the highest Benefit to Cost ratio out of all of the sections modelled. A breakdown of these results for the Manchester to Scotland section are shown below in table 7. All results are calculated over a 60 year appraisal period.
|(1)||Present Value of Benefits||£26,767m|
|(4)||Total Costs = (2) + (3)||£13,545m|
|(6)||Present Value of Cost = (4) - (5)||£3,538m|
|(7)||Net Present Value = (1) - (6)||£23,229m|
|(8)||Benefit-Cost Ratio (excluding Wider Economic Benefits) = (1) / (6)||7.6|
Source: Greengauge 21 (2009b)
The Greengauge 21 analysis provides a very strong positive case for a high speed rail link to Scotland. The Benefit to Cost ratio of 7.6 shows that for every £1 spent by Government, the scheme would deliver £7.60 in benefits. It is important to note that this calculation does not include the significant wider economic benefits which will arise from the introduction of a high speed rail link to Scotland.
Table 8 presents a sensitivity analysis of the Greengauge 21 results. Capital costs have been uplifted by 50% and the present value of benefits have been reduced by 10% to reflect the optimistic assumptions in the Greengauge 21 analysis. Despite these changes the high speed rail link to Scotland provides a strong economic case with a Benefit to Cost ratio of 2.8.
|(9)||Present Value of Benefits = (1) x 90%||£24,090m|
|(10)||Capital Costs = (2) x 150%||£15,276m|
|(11)||Operating Costs = (3)||£3,361m|
|(12)||Total Costs = (10) + (11)||£18,637m|
|(13)||Revenue = (5)||£10,007m|
|(14)||Present Value of Cost = (12) - (13)||£8,630m|
|(15)||Net Present Value = (9) - (14)||£15,460m|
|(16)||Benefit-Cost Ratio (excluding Wider Economic Benefits) = (9) / (14)||2.8|
Source: Greengauge 21 (2009b)
Overall, it can be seen that the high speed rail link to Scotland provides significant economic and environmental benefits to Scotland and the rest of the UK. The new link will successfully meet all of its objectives; increasing capacity to comfortably accommodate future demand, significantly improving journey times between Scotland and some of the UK's major cities, encourage modal shift from air to rail, supporting and benefitting businesses throughout Scotland and enabling Glasgow and Edinburgh to remain competitive in attracting inward investment.
Nonetheless, it is important to note that it is not just the scale of benefits but the timing of when they are delivered that is important, which is why it is essential that Scotland is included in the construction programme north of Birmingham.