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View offers Hi {{fullName}} * My Independent Premium * Account details * Help centre * Logout (BUTTON) News > UK > UK Politics HS2: Cost of London-to-Birmingham leg of proposed new railway a third higher than previously estimated Exclusive: The link was forecast at £21.4bn at 2011 prices - it is now approaching £30bn * Mark Leftly Deputy Political Editor @MLeftly * Saturday 14 November 2015 22:30 {{^moreThanTen}} * {{total}} comments {{/moreThanTen}} * Protesters demonstrating against the High Speed 2 (HS2) rail line father near Parliament ( Getty Images ) The cost of the London-to-Birmingham leg of Britain’s proposed new railway, High Speed Two (HS2), is approaching £30bn – a third higher than previously estimated. The team behind the project, HS2 Ltd, has been asked to submit updated costs of the railway’s first phase to the Treasury ahead of the Comprehensive Spending Review (CSR) later this month. Previously, the London-to-Birmingham link was forecast at £21.4bn, but this was at 2011 prices. The new estimate is designed to reflect better what will have been spent at real prices when the first phase starts carrying passengers at speeds of up to 250mph in 2026. This figure is understood to be in the high twenties of billions. Download the new Indpendent Premium app Sharing the full story, not just the headlines (BUTTON) Download now Known as the “out-turn cost”, it takes account of the rising cost of construction which is being inflated by shortages of building materials and skilled engineering and project management staff. This construction inflation is higher than the general RPI and CPI measurements of inflation, which partly explains the huge increase in the price tag. It is understood that the cost of the entire railway, including the trains and the phase two link from Birmingham to Leeds and Manchester, is likely to be £70bn to £80bn, up from £50bn in 2011 prices. An artist’s impression of an HS2 train, due to start running in 2026 The project’s supporters argue the revised cost does not mean the budget has increased, because it is the same amount adjusted to take account of economic changes as the project develops. The Department for Transport (DfT) has also claimed that every £1 of public money spent on HS2 will provide £2 of benefit to the wider UK economy, and many people working on HS2 believe this to be a conservative estimate that plays down the railway’s boost to the country. But anti-HS2 campaigners are furious at both the amount of public money being spent on the railway and the fact that it will carve through the English countryside. HS2 has already been hit by cost over-runs: in 2013, HS2 Ltd admitted it had got its sums wrong, increasing phase one’s budget alone by more than £5bn. A spokesman for the Stop HS2 campaign said that the new price estimate proved the project is a “white elephant”. Ministers are already under pressure from Conservative backbenchers whose constituencies are located along the HS2 route to axe the project. They are likely to vote against a bill authorising HS2’s construction when it reaches the floor of the House of Commons next year. A source who has worked on HS2 added the project’s costs means other transport projects will be squeezed during the 2020s. The source added: “The DfT is not a protected department [from spending cuts]. Somebody’s going to have to find £25bn if HS2 ends up costing around £75bn - and that means roads or rail will have to be cut.” The source added it is “a logical planning assumption that HS2 will be flogged” to the private sector to run it shortly after the second phase is completed in the 2030s. It is understood there have been some informal discussions at HS2 Ltd on future ownership, which could see foreign companies run the railway. Inside Politics newsletter The latest news on Brexit, politics and beyond direct to your inbox ____________________ Enter your email address (BUTTON) Continue (BUTTON) Continue Please enter an email address Email address is invalid Fill out this field Email address is invalid Email already exists. Log in to update your newsletter preferences Register with your social account or click here to log in receiveBrexit_______ [ ] I would like to receive updates on politics every morning by email Update newsletter preferences Industry sources believe HS2 will ultimately be sold to the private sector in concessions lasting around 30 years, as happened at HS1, which links London to the Channel Tunnel. Two Canadian pension funds, Borealis Infrastructure and the Ontario Teachers’ Pension Plan, paid £2.1bn in 2010 to run HS1 until 2040. HS2 is a much longer line and could be sold in up to three separate concessions, another source suggested, which could help recoup some of the project’s massive cost. Read more * HS2 review delayed over fears team behind project might fail tests * Experts surprised at HS2's use of public-sector staff * Labour to curb soaring costs of HS2 rail link The Stop HS2 spokesman said: “These figures show that since HS2 was first announced in 2010, there has been a near doubling of the costs, and with trains not due to run for over another decade, who knows where the cost of this white elephant will end up? “A responsible chancellor would be asking serious questions about whether it is really worth it, but instead Mr Osborne is cooking the books to invent benefits which simply aren’t there to make HS2 look more palatable, at the same time as drawing up plans to flog it off the private sector at a fraction of the cost. “If HS2 was really worth it, investors would be lining up to build it. The fact they are not shows this is nothing more than a vanity project, the costs of which will continue to spiral.” A spokesman for HS2 said: “HS2 Ltd cannot comment on speculation around the content or outcomes of the spending review.” More about HS2 | train | rail-link | UK politics | Show{{#moreThan3_total}} {{value_total}} {{/moreThan3_total}} comments Comments Share your thoughts and debate the big issues Learn more (BUTTON) {{#singleComment_p}}{{value_p}} Independent Premium comment{{/singleComment_p}}{{^singleComment_p}}{{value_p}} Independent Premium comments{{/singleComment_p}} (BUTTON) {{#singleComment_open}}{{value}} open comment{{/singleComment_open}}{{^singleComment_open}}{{value}} open comments{{/singleComment_open}} Open Comments Join the discussion (BUTTON) Please be respectful when making a comment and adhere to our Community Guidelines. * You may not agree with our views, or other users’, but please respond to them respectfully * Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable * Do not impersonate other users or reveal private information about third parties * We reserve the right to delete inappropriate posts and ban offending users without notification You can find our Community Guidelines in full here. 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HS2 dubbed white elephant as costs ratchet up by a third 1/2 Protesters demonstrating against the High Speed 2rail line father near Parliament Getty Images 2/2 An artist’s impression of an HS2 train, due to start running in 2026