Over-optimistic forecasts for passenger demand have left taxpayers "saddled with £4.8 billion of debt" over the HS1 Channel Tunnel rail link, a report by MPs has said.
These "unrealistic estimates" for the London to Folkestone HS1 link must not be repeated when the business case is made for the proposed London to Birmingham HS2 high-speed line, the report said.
Total taxpayer support for the 68-mile HS1 over the period to 2070 is likely to be £10.2 billion, the report from the House of Commons Public Accounts Committee added.
International passenger numbers on HS1 are only a third of the 1995 original forecast and two-thirds of the level the Department for Transport (DfT) forecast in 1998, said the committee. It went on: "Over-optimistic and unrealised forecasts for passenger demand on HS1 left the taxpayer saddled with £4.8 billion of debt."
The report added that the delivery of regeneration benefits from HS1, on which high-speed Eurostar trains travel, "suffered from a lack of effective leadership from the centre". The committee said the department "does not have sufficient understanding of the economic impact and regeneration benefits of transport infrastructure, compared with alternatives, so is not able to make fully informed investment decisions".
The LCR company was awarded the contract to build HS1 in 1996. The DfT agreed to restructure the deal in 1998, guaranteeing most of LCR's debt, after Eurostar revenues were substantially below LCR's forecasts.
Commenting on the report, Public Accounts Committee chairwoman Margaret Hodge said: "While HS1 provides an efficient service, contributing in an important way to British transport infrastructure, there were costly mistakes in the history of the project. These must not be repeated with HS2."
A DfT spokesman said: "Network Rail predicts the West Coast Main Line will be full by the mid-2020s and HS2 presents the most effective solution to this looming capacity crunch facing our rail network. This is in addition to the jobs, regional regeneration and improved connectivity the project will deliver."
Matthew Sinclair, director of the TaxPayers' Alliance, said: "DfT case for HS2 is based on a number of flawed assumptions, including a new set of unrealistic passenger forecasts, but ministers are preparing to spend £32 billion on what risks being a humongous white elephant.
"There are higher priorities than a train line that will only benefit a fortunate minority, while costing well over £1,000 for every family in Britain. It would be a dereliction of duty of the part of the Government if it does not follow the committee's advice and conduct a thorough cost benefit analysis of HS2 before another single penny of taxpayers' money is spent on the project."
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