Overseas investors would be “delighted” to invest in the controversial HS2 high speed rail project, according to Pippa Malmgren, president of Principalis Asset Management.
Speaking at the Infrastructure Summit organised by the Economist Events, Malmgren said that foreigners find hard assets – those related to infrastructure and transport in urban areas – to be very attractive.
She argued that HS2 doesn’t have to be so expensive– its cost has been expected to rise over £50 billion – because there are other ways to write off the construction cost.
Malmgren said that businesses need to be more creative, adding, “We have to trust the capacity of human beings to innovate. But we don’t have to choose when it comes to hard assets because the global demand for them is so overwhelming.”
Malmgren was part of a panel discussing the role of infrastructure in shaping future cities. Another speaker, Jaana Remes, head of the McKinsey Global Institute, said that 40% of money spent on infrastructure is wasted on average – with few exceptions of countries that are able to manage their funds efficiently, such as Chile.
Matthew Pencharz, mayoral advisor on the environment for the Greater London Authority, added that all the speed and efficiency gained from HS2 risked being lost because more people arriving to Euston Station will have to queue for half an hour or so to get to the tube. The station often becomes overcrowded at peak hours.
Labour leader Ed Miliband has consulted Lord Adonis, one of the HS2 project’s founders, to learn how the estimated £42 billion costs can be brought down.
A reduction of construction costs might see the Labour party back the project. It has previously claimed that the plans should be dropped if better ways to spend the money are found.