Friday 14 September 2018 5:28 pm

Cost of buying land to build high-speed HS2 project tripled to £3.3bn over six years

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The costs of acquiring land needed to build the £56bn HS2 high speed rail project tripled from just over £1bn to £3.3bn over a six year period, according to the spending watchdog.

In 2012, HS2 Limited, the company building the rail line that will link London to Birmingham, estimated land and property acquisitions would cost it £1.1bn. By 2015,  the National Audit Office (NAO) said that figure had spiralled to £3.3bn because of route changes and the cost of compensation schemes.

Phase one of HS2 will link London to Birmingham while phase 2a and 2b will link Birmingham to cities in the north including Manchester, Leeds, Wigan and Sheffield.

The project has faced ongoing scrutiny about costs, with a leaked report by the government's infrastructure and projects authority (IPA) suggesting that the project is "highly likely" to exceed its budget by 60 per cent and cost more than £80bn.

It also described the scheme as “fundamentally flawed” and in a “precarious position”.

The NAO said: "It is understandable that concerns have been raised with us about HS2 Ltd’s land and property acquisition programme given that it affects so many individuals and businesses. Although HS2 Ltd has made efforts to improve its land and property function since 2015, there is work to be done to support claimants to receive timely compensation where they are due an advance payment. 

"While HS2 Ltd’s estimate of the cost of land and property has increased significantly over time, cost estimates, particularly in this sort of major land acquisition programme, are inherently uncertain and subject to change as more information becomes known about both the design and operation of the railway, and the nature of the land and properties required. "

A spokesperson for HS2 said: "We welcome the NAO report which shows that HS2's land acquisition programme remains on track. The overall cost of the land acquisition programme reflects changes to scope, land value and parliamentary amendments. Much of this is as result of public consultation. The NAO highlight that this is normal for a programme of HS2's scale and complexity.

"HS2 ltd wants to ensure all payments to those affected are timely as well being fair to them and to the taxpayer. The majority of those who apply for early payments receive them, and we are working to ensure that this applies to all cases where we have enough information to assess the payment."

Read more: HS2 hit by 12-month delay in further blow to controversial £56bn project