Berkeley calls for review of HS2 as predicted Phase 1 costs soar to £48bn
Developing HS2 Phase 1 from London to the West Midlands will cost an estimated £48bn – double the figure quoted by ministers in December last year, new estimates by QS Michael Byng, the author of the Suite of Rail Method of Measurement documents commissioned by Network Rail, have revealed.
Today’s revelation, according to lord Berkeley, means that the entire cost of HS2 – £48.7bn (excluding rolling stock) – will actually be taken up by Phase 1, leaving no cash left to complete Phase 2A to Crewe and Phase 2B to Leeds.
This latest development follows a plethora of problems HS2 has felt in the last few days, most recently when RTM reported that CH2M had pulled out of the contract for Phase 2B development.
Before that, MP Andrew Bridgen had been forced to apologise in Parliament for not declaring that his house was set to be bought by HS2 Ltd when he raised concerns with the project in a debate in 2015.
Two weeks ago, RTM also reported that the award of £8.6bn civil contracts for HS2 had been pushed back to June and that the company was requesting further information from the firms locked in the procurement process.
HS2 was granted royal assent in February this year, but its recent problems have cast doubt over how quickly any work can actually start on the anticipated new rail line.
The new study has led Lord Berkeley to pen a letter to the commercial secretary to the Treasury Baroness Neville Rolfe on the issue, as he wrote: “You will be aware of my statements in the Lords on several occasions recently about the costs of HS2, where I believe that the costs of Phase 1 are likely to be in the region of £54bn rather than the £24bn quoted in a Written Answer HL4189 to me from Lord Ahmad on 21 December 2016.
“HS2 do not have a properly worked up cost estimate for HS2 Phase 1. Even though we have been asking for a breakdown of their £24bn figure to demonstrate that the scope, the rates and percentage add-ons are in line with current industry experience, there appears to be nothing.”
Commenting on the costing problems raised in Byng’s estimates, Lord Berkeley added: “In spite of spending over £1bn on consultants’ fees, HS2 has no credible breakdown of the costs of Phase 1 and, in spite of several meetings, has produced no serious challenge on scope or rates to Michael Byng’s estimate of £ 48bn for Phase 1.”
He added that on the assumption that DfT estimates for Phases 2A and 2B are similarly some 50% low, then it is predicted that the Treasury will have to sanction another £50bn for these later phases if they are to happen, taking the whole project to over £100bn.
“Since the government remains committed to delivering HS2 within this funding envelope of the £55.7bn there needs to be an urgent and independent audit of scope of project and costs before any more major expenditure is committed,” said Lord Berkeley.
The project was debated in the House of Lords between Lord Berkeley and Lord Ahmad, who disagreed that HS2's figures were flimsy said that "I am confident of the robustness of our costs".
But an HS2 spokesperson told RTM: “HS2 represents a once in a lifetime chance to rebalance the national economy. It will transform travel in this country, connecting eight of the 10 largest cities in the UK, as well as improving capacity for passengers and productivity for the economy.
“We take our responsibility to the taxpayer very seriously and are confident we can deliver this project on time and on budget.”
Top Image: HS2 Ltd Birmingham and Fazeley canal viaduct
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