Construction only started last month, but overspend on HS2’s on track to hit... £1BILLION
OVERSPENDING on HS2 has almost reached £1billion and the project could face further delays, it emerged yesterday.
Ministers blamed the extra costs on ‘significant challenges’, including a £400million bill for asbestos removal and a further £400million spent on preparations to redevelop Euston station in central London.
Worse still, they admitted the £106billion high-speed railway could face further additional costs, as well as delays caused by ‘reduced productivity’ at some HS2 worksites during the pandemic.
This includes a potential delay to the planned 2029 opening of services from north-west London to Birmingham.
The latest overspend will alarm critics because, in February, the Government said the project’s budget had been ‘ comprehensively reset’ following years of criticism over spiralling costs. The overall bill has soared from a projected £36billion in 2012 to an estimated £106billion now.
But Prime Minister Boris Johnson
‘Obsolete before it is even built’
had promised to ‘restore discipline to the programme’, with a dedicated minister asked to prevent any ‘further blowouts’ on budget and schedule.
Despite the extra costs, the Department for Transport (DfT) insisted it is still expecting to deliver the first part of the project within the target cost of £40.3billion.
Preparatory work on ‘phase one’ of HS2 from London to Birmingham has been underway since 2017 but full construction only started last month.
In an update to Parliament, HS2 minister Andrew Stephenson said yesterday that ‘significant challenges’ in the preparatory work had led ‘cost pressures’ of £800million.
And he warned: ‘Some works have been delayed and at some sites Covid- safe practices have necessarily reduced productivity to a limited degree’.
However, the setbacks will intensify concerns among MPs, including Tories with constituencies along the route, who are deeply against the expensive project.
Former Tory Cabinet minister Dame Cheryl Gillan said: ‘ Yet again the taxpayer is footing this giant bill for a white elephant railway that is now obsolete before it is even built.
‘With people using less public transport and work patterns changing, it should be stopped immediately and the money spent on high- speed broadband and supporting jobs in other parts of the economy.’
A spokesman for the Stop HS2 pressure group said: ‘Typical of the double-speak and spin we expect when it comes to HS2, this report starts off saying they are “getting a stronger grip on delivery to time and budget”, but then admits they’ve blown an extra £800million and having trains running for 2029 is looking dodgy.
‘While we have witnessed HS2 lurching from one disaster to another over the last decade, this is one of the more spectacular admissions of mismanagement and failure.’ In July, HS2 was given a ‘red’ warning by Government experts within the Infrastructure and Projects Authority (IPA).
This is the worst possible rating, reserved for schemes deemed ‘unachievable’ due to problems that ‘do not appear to be manageable or resolvable’. Further doubts have been raised by the pandemic, which has led to a sharp drop in public transport usage as commut ers are now working from home. In April, the DfT’s business case for HS2 acknowledged it is ‘not possible to say’ whether the coronavirus crisis will have a further effect on the project’s forecast economic benefits – estimated to be just £1.20 of benefit for every £1 spent.
The first 225mph trains are set to start running between Old Oak Common in the capital and Bir mingham from between 2029 and 2031, cutting journeys between the two cities from 1 hour and 21 minutes to 45 minutes.
Once the line reaches Birmingham, it is expected to split in two with one branch heading to Manchester and the other to Leeds.
The railway is expected to open in full by 2040. The Leeds leg is
regarded as one of the most important parts of the project, providing much-needed improvements to North-South rail links.
But last week, ministers said key decisions on the vital stretch would be deferred because ministers are ‘prioritising the development of the western leg into Manchester’.
Ex- transport secretary Lord Adonis claimed the extension of HS2 to Leeds ‘will probably not go ahead’ as a result of the decision.
A DfT spokesman said yesterday: ‘HS2 will become the spine of the country’s transport network, bringing our biggest cities closer together, boosting productivity and rebalancing opportunity fairly across the country.
‘As construction continues, this Government remains relentlessly focused on controlling costs, to ensure this ambitious new railway delivers its wealth of benefits at value for money for the taxpayer.’
‘Mismanagement and failure’