Cyprus Gives In – Four months on from the announcement and officials have just agreed to a 47.5 percent haircut with international lenders on deposits exceeding €100,000 in the Bank of Cyprus. This will allow the bank to come out of administration but then it will face new problems as account holders look to move their money elsewhere. The bank is already closing branches and firing staff but worse could lie ahead.
DAB Radio Hangs On – The Goverment’s decision on the future of DAB radio has been pushed back until December – the latest possible date that still meets the 2013 target. Considering the volume of radios still being sold it seems highly unlikely that the DAB will reach the targets promised by its promoters. Even with all the Internet radio / Freeview / Freesat included volumes are still below target. Another compromise (fudge) coming up.
HS2 and Short Memories – An enormous range of benefits are promised if high speed trains run north of London. But few seem to recall that this has all been promised before. When the first high speed links were agreed part of the justification was the links north of London. And this got further than a promise with someone (the taxpayer I guess) funding new high speed trains to run to Leeds, York, etc. These trains were actually built and then tested on the East Coast Mainline. However there were always technical issues that stopped them going into service. And eventually the northern Eurostar plans were scrapped – along with the promised economic benefits. Soon some ex-Eurostar trains appeared on regular service with GNER on the London-Leeds services – issue free.
In the real world the East Coast Mainline still has “slam-door” [Type 43 Inter-City 125] diesel trains in regular operation. Trains that pre-date the original electrification of the line in 1988. But at least there is some progress here. Hitachi Super Express trains are planned to be built at a new factory at Amazon Park, by Heighington railway station Newton Aycliffe, County Durham. Construction of the factory should now have started with train production beginning in 2015 and aiming to be in normal service on the Great Western Mainline by 2017 and the East Coast Mainline by 2018. Some £5,700 million has been committed to a construction programme involving over 800 carriages / power cars.
The biggest improvements for passengers would come about not through HS2 or even these Super Express trains – but through more carriages and the elimination of pinch points on the network; where fast services are blocked by stopping services running just ahead. This would need some longer platforms and more four track sections – but would benefit far more actual travellers than HS2. Current restrictions mean that the new trains are only planned to have nine or ten passenger carriages – whereas existing Eurostar trains already have eighteen.
Smart Meters – Over recent days British Gas has launched its advertising campaign to convince customers that their new smart meters are going to be a big consumer benefit. It will be interesting to see how many are convinced. But, given the numbers that claimed they did not know what they were doing when they bought useless insurance and investment products, British Gas may get plenty of takers. The lawyers will be lining this one up for the day when all the current mis-selling cases stop raking in the fees.
This week Croatia became the 28th member of the EU. When they started their application process EU membership was an exciting – and profitable – prospect. A club offering lots of cheap money and generous subsidies or handouts. But recently the financial mess in other EU countries – and an extended recession in Croatia – has trimmed back expectations to more realistic levels.
So Croatia, a country with a population less than Scotland, starts out this week as the third poorest EU country – behind Bulgaria and Romania – and the newest member of an unstable euro zone. Now that’s a lot better than civil war but not quite the free ride envisaged ten years ago. Worst still it joins in the week that Portugal is cracking under the strain of the on-going austerity plans. Already this week there has been the resignation of Portugal’s Finance Minister and its Foreign Minister forcing the markets to raise borrowing costs and triggering a fall on the Lisbon stock market. More problems lie ahead.
Back in April Grandad commented that – “Portugal has already had 78,000 million euros in bailouts but new estimates say that it will need to borrow 14,000 million euros more in 2014 – then more again in 2015”. Now that’s a big financial problem; even on an EU-wide scale. And one that has not been improved by adding another poor and recession-hit country into the eurozone mix. Of course Brussels says not to worry and things will improve soon – but the promises are starting to sound less convincing with each repetition.
And grassroots commentators have pointed out that this is exactly why Barosso quit as Portugal’s Prime Minister, before finishing his term, switching to a safe job at the top of the EU. A tactic employed equally well by Herman Von Rompuy – in moving from Belgium’s Prime Minister (for just 11 months) to EU President – and getting enough to retire in the process.
Since age seems to be no barrier it must be time for any Grandads that are short of funds to apply for vacant EU posts now – and make some serious money before the euro cash dispenser runs out.
It’s less than six months since the proposed high speed rail links north from London were covered here. But even before the approval process has been completed the costs are climbing. The previous £34,500 million has now moved along to £43,000 million (and is being quoted at 2011 prices). So that’s £8,500 million more that in February.
However some MPs have checked their idiot’s guide to railways and discovered that – unlike roads – the scheme would also need to include building vehicles that could use it. Since there does not seem to be any freight demand (Royal Mail replaced their trains with trucks a few years ago) or car transporters or sleeping cars then the vehicles needed will be standard passenger coaches. Railnews gives an estimate of £8,000 million for building these trains – but other sources are quoting up to £11,000 million.
But if the MPs read on further in their idiot’s guide then they will spot that – again unlike roads – the scheme will also need provide power for the trains. I suspect that the HS2 supporters have, so far, said that electricity needed will simply be taken from the national grid – and forms, therefore, an operating cost excluded from the build costs. But with ironic timing comes the latest warning that Britain risks of running out of electricity generating capacity during the coming winters. And that the government are now facing the prospect of reopening old power stations to meet demand.
So simply plugging the new train sets into the mains won’t be a good enough plan. To be truly self-sufficient HS2 would need two separate power generation sources. But it could get away with one by being part of the national grid. So at least one new power station should be added to the project cost – even if it is not used solely for powering the HS2 trains. That’s so the trains can be kept running over the winter without having to cut off Birmingham’s power supplies. One guess is that a modest power station would add £800 million (?) to the ever-growing total.
Any project that has increased its budget estimate by £17,000 million in less than six months is bound to increase by much more before completion. Time to revise that estimate of ticket costs – and London-Birmingham for £300 return now looks much too optimistic. How about £450 return – on advance purchase and before inflation gets added to all these estimates?