Life Cycle Costing

Learning outcomes To identify the Life Cycle Cost considerations of mega projects (High speed rail – HS2)

HS2 objectives To connect the city centres of: London, Birmingham, Leeds and Manchester To enhance the economic development

Project details The line is in a "Y" configuration to be built in two phases Construction starts – 2017 Expected completion – 2033 (Phase 1 – 2027) Developer – HS2 Ltd (established by the UK Govt) Capacity - conveying up to 26,000 per hour @ speeds of up to 400 km/hr (250 mph) Length – 540Km (Phase 1 – 190Km) Construction cost – £32.7b (2011) however Institute of Economic Affaires noted the cost will be increased up to £80b

Route map (HS2 / Y- network)

Life cycle cost components Capital construction cost – cost of land purchases, design, materials, construction and allowance for risk Rolling stock capital costs – the purchase costs of rolling stock (trains) Operating costs – the operation and maintenance of the railway infrastructure, its trains including train crew and station staff

Infrastructure capital cost Phase 1 (£16.2b) & Full Y network (£32.7b) – including contingencies Rates were based on Spon’s Civil Engineering and Highway Works Price Book Tunnelling / bridge costs were based on Infrastructure UK cost study work

1. Capital cost components 250 cost elements were identified Cost reflects on the route section Permanent way – rail, sleepers, ballast, walkway, track drainage and high security fencing; Changes and crossings – based on number of crossings and associated line-speed; Overhead Line Equipment – overhead line equipment, support structures and power supply; Train control systems – includes all signalling and communication requirements and control centre; Stations – civil engineering works, station buildings, station facilities, track, switches, Earthworks – site clearance, earthworks, soiling, seeding and small structures for the permanent way only Retaining walls – associated earthworks, concrete, formwork, reinforcement; Structures – associated earthworks, concrete, formwork, reinforcement, pre-cast units, structural steelwork and finishing works; Tunnels – excavation, tunnel lining, cross passages (for twin-bore tunnels), shafts, plant and associated control systems. Highways – include site clearance, fencing, vehicular barriers, drainage, earthworks, pavement, kerbs, footways, signs, lighting and small structures/accommodation bridges;

1.1 Capital cost Land cost (Phase 1) - includes property, disturbance and resale values – £966m Other associated cost – varies with the construction cost

1.2 Other capital costs Environmental mitigation (urban areas or areas of known environmental significance 5% of base construction cost, in other areas 3%) Surveys (ground and topography) - allowance of £150,000 per km Rail possession / isolation / safety management - 2% of base construction cost for route sections affecting existing railway

Cost estimate (Full network)

1.3 Rolling stock (train) capital costs Two types of trains will be used to operate HS2 services. Captive size sets (Euro size) Classic-compatible sets (British mainline)

2. Renewals Recognising that the HS2 business case is evaluated over a 60 year period

3. Operations & maintenance The calculations were based on HS1 costs. At 2011 prices, an annual figure of £191,000 per km (£103.14m). Captive set maintenance - £2.97 per kilometre travelled for a 200m captive train Classic compatible set maintenance - £3.71 per kilometre travelled for a 200m set. £4.82 per kilometre travelled for a 260m Traction power (electricity grid for the supply of electrified rail networks) cost;

Further information

Questions?