£366 million could be added to the overall cost of HS2 following the latest delays – potentially bringing the final bill to £100 billion.
Following the UK Government’s announcement in March to slow down construction of the Birmingham to Crewe section of the high-speed rail line to address soaring inflation and costs, millions of pounds could now be added to the overall spend, reported the Financial Times.
The major infrastructure project has been plagued with delays, successive cost revisions, and rescoping since its original price estimate of £33 billion was reported nearly a decade ago.
The original vision for HS2 was to create a quick and efficient rail connection from London to Manchester and Leeds via Birmingham – however much of the line going to Leeds has since been cut.
The construction programme of Phase One, linking London and Birmingham, has also been pushed back from 2026 to somewhere between 2029 and 2033.
Then, in March, transport secretary Mark Harper revealed Phase 2A, linking Birmingham and Crewe, would be delayed by two years due to the “significant” impact of inflation.
That section of the scheme had already been revised back from 2033 to between 2035 and 2041.
Mr Harper said at the time the decision to rephase construction had been a “difficult” one.
And yet despite attempts by government to reduce annual expenditure by spreading costs over a longer period, “officials” close to the project have now revealed the delay to Phase 2A could see an additional £366 million heaped on to the total cost of HS2.
It was also revealed in March, around the time the delays were announced, pushing back the Crewe section could also put construction firms out of business, as well as raise costs.
“They admit it will cost jobs, that construction firms could go bust,” shadow transport secretary Louise Haigh told ministers after a leaked document by senior officials was seen by Labour.
Project delays often involve extended site time, contract revisions, workforce renegotiations, and ripple effects through the supply chain.
It is also understood the cost of rebuilding the Euston section of HS2 has risen by £2.2 billion to £4.8 billion – and that the 7.2 km tunnel between Euston and Old Oak Common will not start in 2024 as initially planned.
Recent estimates for HS2 put the total cost between £70 billion and £100 billion.
A Department for Transport spokesperson said: “HS2 will bring transformational benefits to passengers for generations to come by connecting regions across the UK, supporting tens of thousands of jobs and growing the economy.
“Large infrastructure projects have to be funded sustainably. Over the next two years, spending will remain within the annual budgets and some stages of the project will be rephased to ensure they are delivered in the most cost-effective way for taxpayers, as the Government set out to Parliament in March.”
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