Summary: One of the questions we often don't ask enough is how much will this project really cost? I don't mean the estimate, I mean how much will we need to spend by the time its finished. This is a question that the UK government should have asked about its latest high speed railway. Work on the first phase of the project - between London and Birmingham - is well under way and that part of the line is due to open by 2033. But there have been a series of reports over the years that the real cost will be way over the initial estimate. And now there is speculation that the railway might not even make it to London!
Why this is important: While the failures of big projects make great headlines, we should also care for another reason. We are going to need a lot more mega projects in the coming decade.
The big theme: The sustainability transitions are going to require new infrastructure, a lot of new infrastructure. Everything from new wind and solar farms, through electricity transmission, nuclear and hydro, buildings, bridges and railways. To make sensible decisions about which options we prefer, we not only need to know what they do for things like CO2 reductions, we need to know how much they will cost. Overly optimistic estimates will lead to poor allocation of resources and, from a finance perspective wasted capital and lower than expected returns.
Summary of a story from The BBC
The UK Chancellor has confirmed that the HS2 rail line will go all the way to London Euston, following a report the scheme may no longer reach the capital's centre. The Sun newspaper reported that rising inflation and construction costs mean trains may terminate in west London instead.
The estimated cost of HS2 was between £72bn and £98bn at 2019 prices. A report published last October found it was unlikely that the £40.3bn target for the first section of the line would be met. Transport Secretary Mark Harper said HS2 was "experiencing high levels of inflation" and it was working with "suppliers actively to mitigate inflationary increases".