Friday 24 January 2020 12:01 am

Time ticking on HS2: Work 'must start within 67 days' to avoid further delay to £106bn project

The controversial HS2 rail project was delivered a stark deadline this morning, as the government spending watchdog declared the scheme would be delayed even further unless construction begins in the next 67 days.

In its fourth report on the project in the last seven years, the National Audit Office (NAO) also said the Department for Transport, the government as a whole and HS2 Ltd, the company tasked with running the scheme, “underestimated its complexity and risk”.

This has led to the predicted cost spiralling by about £50bn since the last report in 2016, it added.

The damning conclusions come as Boris Johnson and transport secretary Grant Shapps continue to prevaricate over whether the infrastructure project will get the final green light.

It also follows this week’s revelations that HS2 could cost as much as £106bn, according to the government’s own review written by former project chairman Douglas Oakervee.

According to the NAO, contractors including Balfour Beatty, Vinci, Kier and Costain have until the end of March to get spades in the ground and begin main civil construction work.

HS2 route map
The HS2 route map (HS2 Ltd)

If they do not, the estimated opening date of between 2029 and 2033 for the first phase between London and Birmingham looks increasingly remote, said the watchdog.

“This is because some of the construction work can only be done at certain times of the year,” it said.

“Delays may also reduce the amount of time allocated for the latter stages of a programme, such as integrating the signalling and systems which control the railway, and testing the intended operation of the railway, which are complex and risky parts of delivering a project on time and budget.”

In its response this morning, the DfT conceded it had made “significant underestimations of both the cost and the schedule of HS2 in the past”.

Critics argue HS2 will do damage to the British countryside
Critics argue HS2 will do damage to the British countryside

Critics urge government to shelve project

Critics seized on the report to urge the government to scrap the project altogether. Dr Richard Wellings, head of transport at the Institute of Economic Affairs, said: “It’s not too late to scrap HS2.”

“There is a need for improving transport capacity, but HS2 is not an efficient or cost-effective solution.”

However, Matthew Fell, chief UK policy director at the CBI, said: “What is clear to the CBI and business generally, is the colossal cost of not delivering HS2.

“If the government truly believes in levelling up the regions, especially the Midlands and the North, it should deliver HS2 in full.”

HS2 Ltd said that since appointing a new chief executive in 2017, Mark Thurston, it had made sweeping changes and improvements to the organisation. 

As a result, officials now have “a greater understanding of the ground conditions and build requirements,” rendering its most recent cost estimate for the London-Birmingham phase “robust” – an assertion the NAO also acknowledged.

Boris Johnson's government is yet to formally decide whether to go ahead with the project
Boris Johnson’s government is yet to formally decide whether to go ahead with the project

Costs ‘could rise even further’

However, the watchdog said there was a risk that costs could rise even further, mainly because of significant uncertainty over the second phases connecting Birmingham, Manchester and Leeds.

“Phase two is at an early stage of development, and given the reasons for cost increases on phase one, we do not think that it is possible as yet to estimate with certainty what the final cost could be.” 

Gareth Davies, the head of the NAO, added: ““There are important lessons to be learned from HS2, not only for the Department for Transport and HS2 Ltd, but for other major infrastructure programmes. 

“To ensure public trust, the Department and HS2 Ltd must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway that remain.”

Main image: HS2 Ltd.