HS2: A first-class folly of misty-eyed rail romantics Ironically, there is also mounting scepticism about one huge national transport project that is going ahead: the decision to build a new high-speed railway to Manchester and Leeds, known as HS2. HS2 originated from a flawed political confection before the election. It was conjured up as a way of evading the electorally toxic decision on Heathrow on the grounds that it would relieve the pressure by providing fast travel to the airports of the North. Of course, this was always palpable nonsense, as the capacity needs of Heathrow have far more to do with its role as an international hub. Perversely, HS2 is more likely to make it easier for people from the north to get to Heathrow. The problem with HS2 is not that it is an unattractive idea. It is easy to engender emotional support for faster trains. The problem is that it is financially the mother of all projects: the economics are very unattractive and the risks enormous. Since it was first announced, the costs have escalated relentlessly. It now looks as if it will cost £50bn - nearly £2,000 for every household in Britain for a railway that probably only about 1pc-2pc of the population will use each year. It entails a certain cash outflow for a generation with an uncertain benefit in 22 years" time. The Government's case for HS2 assumes an absurdly low and declining discount rate. It is not risk-adjusted. It might have taken some 300 years to complete York Minster, and a lot longer to build the pyramids, but their paybacks were spiritual: HS2"s success depends on costs and passengers and affordable fares. Worse, railway project costs worldwide are notoriously underestimated. West Coast Main Line overran by nearly 80pc and the Channel Tunnel Link by 40pc. Already, the HS2 project does not meet its cost-benefit criteria. A recent critique by Chris Stokes, a former Strategic Rail Authority executive, clearly shows the costs outweigh the benefits. Even that assessment assumes the project is completed on time, which it certainly won't be. So why is HS2 still a protected species when all other projects are unsparingly scrutinised for efficiency? One reason is that the costs fall outside the Government's spending horizon. It is the political equivalent of a free lunch: visionary benefits with no apparent cost. Supporters, including the HS2 company that is now a full-time lobbyist for itself, have subtly adjusted their arguments. First, there is the "vision thing." Pure cost- benefit analysis shows a lack of imagination. The M25 might have failed this step of the way, but no one would want to "unbuild" it today. That is true, but history is replete with failed major projects driven by the same wishful thinking. Remember Concorde or the TSR2 fighter plane. Second, the case rests strongly on "capacity." If you project current passenger numbers to some point in the future, we may "run out" of capacity on existing railways. The problem is that capacity can be increased faster and more cheaply by investing in longer platforms, de-bottlenecking and advanced signalling. Sir Rod Eddington, who was commissioned by Labour to write a report on the country's infrastructure, convincingly demonstrated that many small projects brought higher returns for lower risk. Capacity also depends on price. Most traffic goes by road and so rail is price-sensitive especially on routes where motorways provide competition. HS2 will be very expensive to build and to run. New modern trains are vastly more costly than their sometimes more comfortable and spacious forerunners. On rough estimates, an HS2 return ticket to Birmingham could be £300. It will be a "rich man's train." Finally, the argument rests on regeneration. This is harder to evaluate as it would be difficult to spend £50bn without some benefit. But it is a southerner's delusion that somehow making Manchester easier to get to from London will make it more prosperous. It would certainly make London more prosperous. It will do nothing for deprived east Manchester and will bypass many of the most needy areas of Britain. I was on the board of British Railways for two years. The organisation stood for all the things I dislike. It was a hierarchical self-serving bureaucracy. Passengers rarely featured in the boardroom - it was assumed that demand was not affected by service or punctuality. BR was led by very competent engineers, but they loved the railway more than they loved the passengers. It was literally their train set. The chairman and some directors would travel in the cab with the driver. Incidentally, the senior staff had "gold passes" and were rarely found in standard class with ordinary folk. That has all gone now. But the same lesson applies: railways are emotional and enthusiasts regard opposition as irrational and almost unpatriotic. Even the otherwise very sensible Lord Adonis turns misty-eyed at the thought of HS2. Railway junkies just love the idea of it. The CBI warned last week that the money for HS2 is not free. It will drain capital from other much more productive investment. It will be so expensive that it will reduce funding for roads, schools and hospitals. There are many better projects that will contribute to growth. Why not turn the ageing M1 into a modern superhighway, accelerate high-speed broadband, create a fast link between York, Leeds and Manchester, have super-trams in our major cities? Of course, this is not to mention the unmentionable Heathrow. For the price of HS2, we would be most of the way towards paying for Boris Island. HS2 is not just a bad piece of accounting. It is a failure of imagination: surely we can think of something better to do with £50bn? Archie Norman is chairman of ITV