HS2 at risk of delay to protect spiralling budget as costs surge

THE launch of HS2 risks being delayed as officials scramble to limit an increase in costs, the project’s chief executive has said.

Mark Thurston warned that the impact of inflation on the building of the rail link has been significant.

In an interview with the BBC, he said costs have surged, “whether that’s in timber, steel, aggregates for all the concrete we need to use to build the job, labour, all our energy costs, fuel”.

He added: “We’re looking at the timing of the project, the phasing of the project, we’re looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation.”

Transport officials are conducting a major review into the future of HS2, Britain’s biggest building project, to avoid a further surge in its budget, which has already risen from £33bn to an expected £71bn. Options under consideration include building a London terminus outside the centre of the capital, while there have also been discussions about halving the number trains per hour and even cutting top speeds.

Mr Thurston is the UK’S best-paid public servant, receiving a salary of between £620,000 and £624,999, according to official filings – nearly four times that of the Prime Minister.

He insisted that HS2 would bring transformational benefits for generations to come.

Jeremy Hunt, the Chancellor, has said it is “inconceivable” that HS2 would not run to central London’s Euston station.

Meanwhile, Huw Merriman, the transport minister, told MPS that the Government remained “absolutely committed” to the project.

“We are absolutely committed to delivering HS2 trains from London to Manchester and, of course, going over to the east as well,” he told the House of Commons on Thursday.

“But of course we have to look at cost pressures, it’s absolutely right that HS2 focuses on costs, that should be expected of the Government and the taxpayer, we’ll continue to do so.

“But I am absolutely committed, as is the Secretary of State [Mark Harper] and the entire department, to delivering HS2 and the benefits for this country.”

Whitehall grandee Sir Jon Thompson, who was formally appointed as HS2’S chairman last month, said: “I concede, it is a lot of money.

“Why is it more expensive building in Britain than in, say, China? Here we do not ride roughshod over the environment, over planning law, over local authorities and local people,” he said.