HS2: Not a ‘cat in hell’s chance’ of private sector funding Euston link, says Sadiq Khan

HS2: Not a ‘cat in hell’s chance’ of private sector funding Euston link, says Sadiq Khan

Are businesses queueing up to help get the Euston HS2 terminus built, as the government intends, following its recent announcement that no public money will be available for the scheme? Not according to Sadiq Khan.

“They have been spooked by the announcement,” the Mayor told London Assembly members (AMs) at Thursday’s Mayor’s Question Time. “Metaphorically, they’ve got their heads in their hands because of the uncertainty. The idea that the private sector is going to put billions into a project, not knowing what is round the corner, what other U-turns might come, is not realistic.”

There was “not a cat in hell’s chance,” Khan said, that private investment would cover the estimated £6,5 billion cost of the scheme, including the tunnelling needed to link Euston to Old Oak Common – currently designated the “temporary” HS2 terminus – plus pedestrian links from Euston to Euston Square and public realm improvement.

Khan’s comments were in stark contrast to those of transport secretary Mark Harper when answering MPs’ questions at the previous day’s meeting of the House of Commons transport committee. Confirming the government’s view that taking HS2 into Euston is the “right thing to do”, he reported “extensive” private sector interest in the government’s approach.  “All the information we have seen so far leads us to believe…we will be able to deliver it in the way we have set out,” he said.

In his six-monthly HS2 progress report to parliament, delivered on the same day, rail minister Huw Merriman confirmed plans for a “development corporation, or equivalent, to create a transformed ‘Euston Quarter’” using private funding to “deliver a station that works”.

A range of delivery models and financing mechanisms were being considered, he said, with the Battersea Power Station and Nine Elms model, which funded the £1 billion Northern line extension through a combination of upfront developer cash and contributions from business rate growth, providing inspiration.

But that was “wishful thinking” said Khan, who accused the government of “cancelling the Euston terminus by stealth”, leaving a crucial part of central London in an ongoing state of uncertainty. “We are raising lots of questions. We are not getting the answers we need,” he said.

Khan was quizzed by Liberal Democrat AM Hina Bokhari about the impact of the government’s decision on local businesses, including the popular Drummond Street cluster of south Asian restaurants and shops, now blocked off from Euston by the mothballed terminus site. He said he had been there recently and had done so as a child, visiting the well-known Ambala sweet shop established on the street in 1965.

“I’m not sure those who decided to cancel the Euston leg understand what’s been happening there over the last few years – the devastation and the impact of the uncertainty it is causing, the indirect consequences – some would say indirect discrimination – for black and minority ethnic businesses,” he said. “It is really important that government makes a decision sooner rather than later.”

Urgent Whitehall decisions were also needed on Transport for London’s bid for cash for extra Elizabeth line trains to help accommodate the onward journeys of some 250,000 people a day expected to use the Old Oak Common station when it is opened around 2030, as well as on TfL’s wider call for capital funding for 2024/25, Khan added.

Despite heading for break even on day-to-day services by April 2024, the capital’s transport network would yet again face a financial cliff edge next year if capital funding of some £500 million was not agreed soon, the Mayor warned.

That amount represents around a quarter of TfL’s capital spending next year, with the remainder covered by the network’s own resources. Without it, TfL could not finalise its future business plans and would be forced to consider “significant reductions” in its investment programme and possibly even reductions in service levels and asset renewal, Khan explained.

That could put at risk schemes including replacement trains for the 50-year-old stock on the Piccadilly and Bakerloo lines, the Docklands Light Railway (DLR) and London Trams, as well as further work on plans to extend the DLR to Thamesmead, Assembly members heard.

The Mayor said TfL is now treated less generously than transport authorities outside the capital, which have been receiving multi-year funding deals described as “London-style” by the government. “All we are asking for is 25 per cent of our capital requirement. Still no answer. That’s how bad this government is when it comes to London. We have our fingers crossed for a decision in the autumn statement [on 22 November] or at least before Christmas.”

Watch Mayor’s Question Time in full here. X/Twitter: Charles Wright and On LondonIf you value On London’s coverage of the UK capital, become a supporter or a paying subscriber to editor and publisher Dave Hill’s personal Substack for just £5 a month or £50 a year. In return you will get a weekly London newsletter and offers of free tickets to London events.

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  1. Philip Virgo says:

    That is in no small party because of his antipathy towards the private sector but also because of the lack of a credible business case for channelling traffic through a rebuilt Euston instead of a mix of St Pancras and Farringdon, plus an Old Oak Common station on the Elizabeth Line with cheap rapid transit links to Acton Main Line, Acton Central and Willesden Junction.

    I used to live in Acton, cycling into work along the tow path of the Grand Union Canal and the business case was obvious. The Victorians had it right. TfL and its predecessors from the 1930s onwards have been an abomination

  2. Tony Zeilinger says:

    Let’s get real, the HS2 to Euston is a public going, needing tax payers funding.

    The public authorities should give serious consideration to cutting further twin bore tunnels to take HS2 through central London. Could it be interconnected with Crossrail 2?

    This option might release even more land for housing and commercial development.

    The elephant in the room are the building contractors, their sub contractors and fee charging professionals, not to mention our bureaucracy.

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