London business chiefs are warning that any delay to building the HS2 tunnel to Euston from Old Oak Common will only drive up costs even more.
The future of the Euston terminal was thrown into doubt after Rishi Sunak last month cancelled the high-speed railway’s northward leg from Birmingham to Manchester because of runaway costs.
No10 refused to guarantee that the line would continue beyond Old Oak Common in West London, unless private investment is forthcoming to redevelop the Euston area with a new station, offices and up to 10,000 new homes.
Lobby group Business Ldn has written to Transport Secretary Mark Harper to stress that abandoning tunnelling works at Old Oak Common would be a false economy.
“In around 10 months’ time this section will be complete and the most logical and cost-efficient next step is for the same team to seamlessly continue construction of the final eastern section of the tunnel into Euston,” Business Ldn chief executive John Dickie wrote in the letter, arguing “there will never be a cheaper time to build this tunnel than now”.
He added to the Standard: “It’s essential for Britain that we get HS2 into central London at Euston.
“The private sector can deliver the project efficiently if Government puts in the right commercial framework. That means allowing the project to capture the value from homes and commercial space built around the station to pay for the station and the tunnelling itself.”
Business Ldn urged Mr Harper to come up with innovative new funding solutions for Euston.
The successful Battersea Power Station development saw the Government extend a loan to City Hall to fund the up-front cost of the Northern Line Tube extension, on the understanding that this would be easily paid back over 30 years’ worth of extra business rate income generated by the redevelopment.
The Government says a development corporation could be set up for Euston, as Margaret Thatcher did for the London Docklands, with special powers to develop thousands of homes. The successful Nine Elms redevelopment is another model.
But Sadiq Khan has slammed the Government’s new plan as “wishful thinking”.
The Euston Partnership, grouping all the key stakeholders including the London Mayor, National Rail and Transport for London, has not met since October 9 - five days after Mr Sunak’s HS2 announcement. Mr Harper has yet to divulge any more detail to the stakeholders on the new approach for Euston.
“As has always been planned, the line will finish at Euston. This is a world-class regeneration opportunity and there is already extensive support and interest from the private sector to invest,” a Department for Transport spokesperson said.
But the department refused to say where the funding will come from, after the Prime Minister said that £6.5 billion earmarked for the HS2 Euston station would instead be diverted to fund transport projects in English regions..