Price of HS2 consultancy contracts rises by £174m

An aerial shot of work underway at Euston station in London in preparation for HS2

The cost of three consultancy contracts of the HS2 high-speed rail project have risen by a total of £174m, new documents have revealed.

The increases, published in the Official Journal of the European Union (OJEU), concern three deals first awarded in 2017.

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All three contracts related to HS2 phase 2 civils design and environmental services, split on a geographical basis.

Arup’s £150m contract for Leeds leg central and Leeds leg north has soared by over £100m to £269m.

Meanwhile WSP and Mott MacDonald won a £100m contract covering the Manchester leg spin and Manchester leg spur, which has now risen to £120m.

Aecom, Capita and Ingeniería Economía Del Transporte were awarded a £100m deal for Leeds leg south and East Midlands which has now increased to £135m.

Citing the reason for the increases, an HS2 spokesman said that when the contracts were procured in 2017, they did not take account of HS2 connectivity with Northern Powerhouse Rail, while the project is also running on longer timescales already indicated in a stocktake published earlier this year. In the contract modifications, HS2 also warned that without modification of the existing contracts, it would lose benefits of the current contract and introduce risks associate with potential new contracts, along with additional procurement costs.

HS2 has already seen its price tag rise from £56bn to £88bn. The project has been subject to an independent review by former Crossrail chairman Douglas Oakervee. Oakervee’s report, which was leaked to the Times, reportedly recommends moving ahead with HS2 despite “inflated prices” but recommends re-procuring some contracts, having criticised HS2’s procurement strategy.

Days after the report was leaked, the inquiry’s deputy Lord Berkeley disowned it and suggested he would produce his own conflicting version, warning that the cost of HS2 was likely to be even higher than £88bn.