Express & Star

HS2 could cost £106bn, says leaked review

An inquiry led by former HS2 Ltd chairman Doug Oakervee reportedly found there is ‘considerable risk’ that the project’s cost will rise by up to 20 per cent.

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An HS2 sign at the edge of a field

Fresh doubts have been cast on the future of the HS2 line between Birmingham and Manchester – as the estimated cost of the project rose to £106 billion.

An inquiry led by former HS2 Ltd chairman Doug Oakervee reportedly found there is “considerable risk” that the high-speed rail project’s cost will rise by up to 20%.

A report by current HS2 Ltd chairman Allan Cook, published just four months ago, set out an estimated cost range of between £81bn and £88bn.

HS2 was allocated £56bn in 2015.

A decision on whether to go ahead with the project will be made in “weeks rather than months”, Transport Secretary Grant Shapps said.

RAIL HS2
(PA Graphics)

Mr Oakervee’s review recommends that work on phase 2b of HS2 from the West Midlands to Manchester and Leeds should be paused for six months to investigate if it could be a mix of conventional and high-speed lines, according to the Financial Times, which has seen a copy of the paper.

The review concluded that the Government should “on balance” continue with the 250mph railway, which would initially go from London’s Euston station to Birmingham and then to Leeds and Manchester by 2040, but that this is subject to “a number of qualifications”.

It said “further work” is needed to assess HS2’s impact on regional growth, and warned that it is “hard” to say what economic benefits will result from building it.

“Transport investment alone will not ‘rebalance’ the UK economy,” the review adds.

Transport Secretary Grant Shapps appeared to hint at a change in the HS2 plan on Friday, when he told the Express & Star that the West Midlands would flourish regardless of whether the Government decides to press ahead with the controversial line, which has been under review due to concerns over its spiralling costs and impact on the environment.

He said a decision was due “shortly” on the future of the route, which is is set to carve through 45 miles of Staffordshire countryside, and is considered vital for the region’s future success by West Midlands Mayor Andy Street.

He said he was “taking advice” from experts on current HS2 contracts, amid concerns that some had risen drastically in cost. “I’m clear that HS2 has to deliver value for money for the taxpayer,” he said. “It has to provide a return so we get more out than we put in.”

West Midlands Mayor Andy Street last year criticised the designs for Curzon Street and Interchange in Solihull, saying they have “have all the quirkiness and charm of Stansted Airport’s baggage drop-off area” as he called for a radical re-think for the way the project is being promoted.

Greater Manchester Mayor Andy Burnham described the leak as “quite worrying” and claimed that using conventional lines in the North would be a “second-class option”.

He told BBC Breakfast: “It’s the same old story. London and the South gets whatever it wants, and it’s all about penny-pinching in the North.”

Judith Blake, leader of Leeds City Council, said: “It is time to bring the damaging speculation around HS2 to an end with the prompt publication of the Oakervee Review and an unambiguous Government commitment to deliver the project in full.”

Rail concerns
Transport Secretary Grant Shapps said the ‘massive decision’ on whether to go ahead with HS2 ‘needs to be fact-based’ (Aaron Chown/PA)

Several construction bosses have claimed scrapping the project would cause “irreparable damage” to the industry.

The chief executives of Balfour Beatty, Skanska and Morgan Sindall were among the signatories to a letter to Boris Johnson, seen by the Times, which urged him to approve the scheme and noted that it would take “many years to get an equivalent pipeline of work in place” if HS2 was cancelled.

But a group of more than a dozen Tory MPs will reportedly meet the Prime Minister in the coming days to urge him to block HS2 and spend the money on other projects.

Mr Johnson is expected to decide within weeks whether to go ahead with construction on the first phase of what would be Europe’s largest infrastructure project.

The review said savings to the £106bn figure could be made by having the private sector contribute to funding HS2 stations, lowering specifications and improving the “cost performance of the management”.

It also stated that no other high-speed line in the world runs 18 trains per hour, and recommends reducing HS2’s frequency to 14.

Mr Shapps said the “massive decision” on whether to go ahead with HS2 “needs to be fact-based”.

He told Sky News: “I asked Doug Oakervee to do that report and said to him ‘Give me the facts, give me the data, give us the information so we can make a proper, informed decision’.

“I’ve always approached this from a relatively neutral point of view and that information will help to inform a decision that is best for the whole country.”

£8bn has already been spent on the project.