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HS2: Rail link costs could rise to £106bn, says review

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Building the high-speed rail link HS2 could cost up to £106bn, a government-commissioned review has said.

The unpublished report, seen by the Financial Times, says there is “considerable risk” that estimated costs could rise by another 20%.

In 2015, HS2 was set to cost £56bn.

The review also recommends pausing the second phase of the project while experts look at whether conventional lines could help link Birmingham to Manchester and Leeds instead.

Mayor of Greater Manchester Andy Burnham told the BBC’s Today programme it would “not be acceptable” if the North of England portion of HS2 was delayed or downgraded to slower speeds.

“To me that would be the same old story. London to Birmingham, money is no object, and then all the penny pinching is done in the North of England,” he said.

Mr Burnham said the development of an east-west rail route across the North – known as HS3 or Northern Powerhouse Rail – relied on HS2 being built.

“The point about HS2 is it lays the enabling infrastructure for the east-west links that we crucially need and most people here would say that those are even more important.

Some £8bn has already been spent on the project, which will connect London, the Midlands and northern England using trains capable of travelling at 250mph.

BBC transport correspondent Tom Burridge said that “on balance”, the review recommends the government should proceed with the project, but he added this “is hardly a ringing endorsement”.

On Friday, Transport Secretary Grant Shapps said a decision on whether to go ahead with the project would be made “very soon”.

The government previously promised to make a decision before the end of 2019.

Some of the UK’s largest construction firms have written a letter to Prime Minister Boris Johnson to warn that cancelling the project would do “irreparable damage” to the industry, costing thousands of jobs, the Times newspaper reported.

Balfour Beatty, Skanska, Morgan Sindall, Costain, Mace and Sir Robert McAlpine are among firms arguing that a dearth of other big projects mean skills could be lost.

HS2 railway.


HS2 in numbers

  • £55.6bn Existing budget

  • £32.7bnOriginal budget

  • £7.4bnAlready spent on the project

  • 9,000Jobs supported by the railway

  • 345 milesNew high-speed track

  • 50 minutesJourney time saving between London and Manchester

Source: HS2

The review, led by former HS2 chairman Doug Oakervee, comes as around 15 Conservative MPs from across England prepare to meet the prime minister this week to raise significant concerns about the project. Some will press him to abandon the rail link in favour of other infrastructure spending in the north of England.

Claire Walker, co-executive director of policy at the British Chambers of Commerce, told the BBC on Monday that the project must go ahead. “Business communities are united that this project should be delivered and should be delivered in full,” she said. “There is no project that has been proposed that will go so far in delivering the transformational change to the Northern business communities as this project will.”

Boris Johnson has sent varying signals on the project so far, insisting costs cannot continue to spiral while also hinting that, temperamentally, he is in favour of a scheme that could help rebalance the UK’s lopsided economy and address regional disparities.

In September, a “stocktake” report by the chairman of HS2, Allan Cook, concluded that the cost had risen to between £81bn and £88bn.

The first segment of project between London and Birmingham is due to open at the end of 2026, with the second phase to Leeds and Manchester expected to be completed by 2032-33.

The spending watchdog, the National Audit Office, will publish another report about HS2 in the coming days.

Despite concerns about the rail link, which is Europe’s largest infrastructure project, work is not on hold and the project currently gets through around £250m a month.

“The North’s civic and business leaders have argued tirelessly that major infrastructure investment is so badly needed to provide the capacity so urgently needed on our rail network,” said Northern Powerhouse Partnership Director, Henri Murison.

HS2 is a new railway line which, once completed, would run from London to the West Midlands, Manchester and Leeds.

Trains on the London to Birmingham route would be 400m-long (1,300ft) with up to 1,100 seats. They would run as many as 14 times per hour in each direction.

The Department for Transport says the project will cut Birmingham to London journey times from one hour 21 minutes to 52 minutes.

Once the second phase is complete, Manchester to London journeys would take one hour seven minutes (down from two hours seven minutes), and Birmingham to Leeds would take 49 minutes (down from two hours).

This would effectively reduce journey times between London and Edinburgh and London and Glasgow by an hour, to three-and-a-half hours.

The government hopes its creation will free up capacity on overcrowded commuter routes.

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BBC News – Business

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