HS2 minister ‘concerned’ at rate of cost increases

Align, a joint venture between Bouygues, Sir Robert McAlpine and VolkerFitzpatrick, is delivering the Central 1 (C1) package of HS2 Phase 1 that consists of 21.6km of high-speed rail infrastructure, including a twin-bore tunnel under the Chilterns (Image: HS2)

HS2 minister Andrew Stephenson has expressed “concern” over the rate at which costs are increasing on the HS2 high-speed rail project.

In his latest six-monthly report to Parliament on the project, Stephenson said that HS2 remains “on budget”.

The overall budget for the project remains £44.6bn. To date, the government has spent £14.9bn out of the phase one target cost of £40.3bn. A further £12.7bn has been contracted but not yet spent.

However, HS2 has now drawn £1.3bn of its £5.6bn delegated contingency budget, representing a £500m increase from the £800m Stephenson reported had been drawn down in his last update.

Stephenson said: “Whilst these pressures are manageable within the target cost given the remaining contingency, I am nonetheless concerned at their rate of increase. I expect HS2 Ltd to maintain its focus on delivery to the target cost.”

Some of the key cost pressures on the project are:

  • An estimate of £800m for potential additional main works civils costs, stemming from additional design costs and slower-than-expected progress in some areas. The figure is £200m higher than Stephenson’s last update.
  • A pressure of £400m on the cost estimate for the HS2 Euston station. HS2 has already made the move to a smaller, less complex 10-platform, single-stage delivery strategy for the station.
  • A £200m pressure against HS2’s budget for changes to Network Rail infrastructure at Euston and Old Oak Common.
  • Another £300m of cost pressure on other parts of the programme.
    Meanwhile, the likely financial impact of the covid-19 pandemic on phase one remains at £400m-£700m.
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  1. Why are we not surprised – Crossrail all over again?
    The project has already been cut back on the Eastern leg and with 50% less rail trips than 2 years ago, it is surely not a justifiable use of the funding.

  2. Construction fill with unforeseens. On project of this magnitude the packages need to divided much more issued into small parcels and shared amongst contractors on more evenly basis. When packages are manageable they can be priced better and be delivered better. It takes little more time but the works will be delivered on budget

  3. Just imagine if we could all claim additional payments for “slower-than-expected-progress”

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