Hitachi delivers high-speed rail in U.K.

Travel time cut but budget woes threaten expansion

by Chris Jasper and Steve Rothwell

LONDON (Bloomberg) Britain’s first bullet trains entered service in London this week, bringing high-speed travel to the world’s oldest rail network, but government spending cuts prompted by the global recession may stunt plans to extend the project.

The 225-kph trains, made in Japan by Hitachi Ltd., cut journey times by 50 percent from north Kent on the southeast coast to London’s financial district using the High Speed 1 line built to carry Channel Tunnel services to Paris and Brussels.

U.K. Transport Secretary Andrew Adonis said the fast Hitachi trains will act as a catalyst for construction of a High Speed 2 route running north from London and slashing journey times to Birmingham, Manchester and other U.K. cities. Christian Wolmar, author of “Broken Rails,” a history of Britain’s railways, said he doubts the line will get built.

“I have a lot of skepticism about this,” Wolmar said. “I’m in favor in principle, but this should have happened 30 years ago. Construction of a high-speed network would have to span economic cycles so it might be better just to improve what we’ve got.”

Britain posted a £19.9 billion (¥3.2 trillion) budget deficit in May, the biggest for any month since records began in 1993, as the recession pummeled tax revenue and pushed up jobless claims. The Institute for Fiscal Studies says government plans imply a £26 billion cut in spending over the three years from April 2011 and that if the opposition Conservatives win power the reduction may be even sharper.

The U.K. was the first country to build a railway system during the Industrial Revolution, establishing the first passenger line between Stockton and Darlington and the first intercity service from Liverpool to Manchester.

The aging infrastructure has limited speeds and Pendolino trains operated by billionaire Richard Branson’s Virgin Group have to tilt around corners even to run at 200 kph.

The first high-speed services to London involved Eurostar Group trains that were able to reach speeds of 300 kph following the opening of High Speed 1 on Nov. 14, 2007. Prior to that, Chunnel services had used a mix of fast new lines and slower existing ones that terminated at Waterloo Station.

Capacity on the 110-km route is only 40 percent utilized, allowing the Southeastern rail franchise run by Go-Ahead Group PLC to introduce a high-speed commuter service using trains from Hitachi. The Tokyo-based company helped develop the original bullet train, which began running in Japan in 1964 at speeds of up to 210 kph.

The first domestic services on High Speed 1 will run from Ashford, west of Dover, via Ebbsfleet to London’s refurbished St. Pancras International Station. The Hitachi trains, called Javelins, are being introduced six months earlier than originally planned and the full timetable will become operational in December.

Go-Ahead will ultimately configure the trains in a 12-car, standard-class only layout able to carry more than 1,000 passengers, said Chris Horton, managing director at Southeastern. Tickets from Ashford will on average cost 20 percent more than for existing services.

Keith Ludeman, Go-Ahead’s chief executive officer, said commuter revenue generally holds up better in a slowdown on longer-distance routes because the majority of people travel in standard class and thus fewer would be inclined to trade down from first class to save money.

Hitachi trains will see regular service in Europe for the first time under the contract with Go-Ahead, and Alistair Dormer, the Hitachi train unit’s general manager for Europe, said the contract should act as a “bridgehead” for the sale of more high-speed trains in the region.

Transport Secretary Adonis, speaking during a trial run on the route June 18, said the new service should provide the impetus for the development of a much longer high-speed route.

“It’s great for the region, but it’s also a milestone for transport infrastructure in this country,” said Adonis, who sits in the House of Lords.

While Britain was late in developing high-speed rail compared with Japan and France, which introduced the TGV in 1981, he said there’s an emerging consensus in the country in favor of High Speed 2.

“I don’t see high-speed rail as a matter for party politics,” he said. “High-speed railways are being built on a sound basis. There’s no going back.”

A study on the viability of a London-Birmingham service has been commissioned by Adonis and is due to be completed by December. Rail lobby group Greengauge 21 is also compiling a report for September that will examine the case for the central-England route and four others across Britain.

The pace of development is the major challenge in building an expanded network, Adonis said, with the project requiring “a major commitment on the part of government.”

Hitachi’s Dormer said the company is expecting a positive impact from the Javelins, which will also transport people to the site of the London Olympics in 2012.

“The real test is whether it captures the imagination of the traveling public,” he said. “But I can’t think how people won’t be impressed.”

That may not matter as Britain grapples with a budget deficit that the government says will double to £175 billion, or 12.4 percent of economic output, in the 12 months that began April 1, the biggest since World War II.

“Substantial deficits” will continue into the next decade, the Organization for Economic Cooperation and Development said Monday, reiterating that the U.K. economy may contract 4.3 percent this year.

Greengauge founder Jim Steer said any development of High Speed 2 may force the government to make spending decisions that would curb budgets for upgrading Britain’s existing rail network, as well as its increasingly crowded roads.

“It’s going to require significant public funding just as we’re coming out of a big recession,” Steer said “We’re going to need some strong strategic investment planning.”

Wolmar says High Speed 2 may never get beyond the drawing board. Even if the project was taken forward now, when government funding is short, construction wouldn’t begin until 2016 at the earliest and the line wouldn’t become operational until 2023, he said.

“Lord Adonis is a great fan of the railway and I support him in that endeavor, but I’m not sure the high-speed route is the best way to go,” he said. “We may have missed the boat.”