Fears have been raised a new high-speed railway serving Sheffield could cost at least £80 billion, double current thinking.
The study calls for it to be scrapped, saying it ‘defies economic logic’.
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In the Institute for Economic Affairs report, to be published today, the IEA says the cost of the scheme has been underestimated and argues the £80bn price tag could deliver £320bn of value if spent on other transport projects.
Campaigners have also warned more than half a million people across Middle England will have their lives affected by the project’s construction.
HS2 aims to provide a 250mph rail link between London and Birmingham, Leeds, via Sheffield, and Manchester by 2032.
The route is set to skirt Killamarsh and Beighton – with some homes having to be demolished – on its way to a station at Meadowhall serving Sheffield.
But the IEA suggested ministers were pushing the scheme through to ‘buy votes’ in northern areas.
The report suggests the government’s £42.6bn estimate would spiral because of a variety of factors – including route changes and extra tunnels to placate opposition; new stations and transport infrastructure around the proposed line; grants for regeneration to provide shops and amenities around the route; and compensation for towns and cities bypassed by the new line.
Dr Richard Wellings, the report’s author, said it was ‘time the Government abandoned its plans to proceed with HS2’.
However, a Department for Transport spokesman said: “HS2 is vital for this country, providing aneconomic boost which will generate a return that will continue paying back for generations to come.
“Without it the key rail routes connecting London, the Midlands and the North will be overwhelmed.
“HS2 will provide the capacity needed in a way that will generate hundreds of thousands of jobs and billions of pounds of economic benefits.”