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Industry welcomes government’s plans to bring HS2 costs down

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HS2 has welcomed the government’s urgent action to control the spiralling costs of the railway.

Credit: HS2 Ltd.

On Monday, Transport Secretary Louise Haigh announced plans to bring the costs of HS2 under control with the potential for HS2 contracts being renegotiated or amended.

HS2 main contractors include:

  • Align JV: joint venture of Bouygues Travaux Publics, Sir Robert McAlpine, and VolkerFitzpatrick
  • BBV: joint venture of Balfour Beatty and Vinci
  • BBVS: joint venture of Balfour Beatty and VINCI SYSTRA
  • EKFB JV: joint venture of Eiffage, Kier, Ferrovial Construction, and BAM Nuttall
  • SCS JV: joint venture of Skanska, Costain, and STRABAG
  • Hitachi-Alstom High Speed (HAH-S) JV: joint venture that supplies and maintains the new high speed trains

In 2009, the then government estimated that HS2 would cost £37.5 billion (2009 prices), with the estimate rising to between £72 and £98 billion (2019 prices) In 2021, for the full length of the railway.

Last year, former prime minister Rishi Sunak scrapped construction of the northern phase of HS2 connecting Birmingham and Manchester. 

Earlier this year, The Guardian reported that phase one of HS2 – between London and Birmingham – could cost up to £66.5 billion, which with inflation would mean the project would be £8 billion to £10 billion more expensive than the 2019 estimate.

Along with HS2 contracts potentially being renegotiated or amended, Haigh will launch an independent review to ensure costs for HS2 are being brought under control, led by senior infrastructure delivery adviser, James Stewart.

Industry Response

A spokesperson for HS2 Ltd said: “We welcome the Secretary of State’s priorities for HS2 Ltd and are committed to working with the new Government to improve delivery. 

“We also fully support James Stewart’s governance review and look forward to his recommendations.

“HS2 Ltd recognises that there are many lessons to be learned from delivery to date and, under new leadership, are actively implementing the changes within our control to stabilise costs. 

“HS2 is a complex project of strategic importance to the UK’s rail network, which will not only provide better journeys, more services and fewer delays for rail passengers, but will unlock economic growth and tackle regional inequality.”

Meanwhile, Momentum Transport Consultancy who is providing engineering and transport planning consultancy services for HS2 has welcomed the government’s plan to bring down the railway’s costs

Will Durden, managing director at Momentum Transport Consultancy, said: “We think it’s essential that there is an honest conversation with industry and the wider British public around infrastructure, its costs and its benefits.  

“As a project HS2 has the potential to achieve great things, including increasing capacity and realising better connections with the North.

“Simply gearing up and starting a project like HS2 takes considerable time and budget, and UK and international investors in such a sizeable infrastructure project demand reliability in their investments. 

“The sustainable growth we want – and need – to be achieving as a country relies on good decision making and long-term commitment to our infrastructure projects at the highest levels.”

HS2 is now at peak construction with more than 31,000 jobs supported by the programme

New HS2 executive chair Sir Jon Thompson has implemented changes to reshape HS2 Ltd to refocus on the delivery of Phase One, since taking the position.

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