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Bidding process launched for HS2 phase 1 construction contracts

The bidding process for seven HS2 engineering contracts has been kick-started today (24 September) in an announcement by chancellor George Osborne in China.

The seven contracts, which will have a total combined value of £11.8bn, will form part of the first phase of construction works on the London-Birmingham route, set to start in 2017.

The launch of procurement process includes the publication of a pre-qualification questionnaire (PQQ) for the ‘main civils works’ – meaning the surface route and tunnels for phase 1. At this stage, suppliers will be allowed to express an interest in all seven packages.

After the PQQ, successful applicants will be able to bid for a maximum for four packages at tender stage, with up to two contracts being awarded per tenderer.

The seven contracts are spread across three geographical areas – north, central and south – along the first phase of the London to Birmingham link.

There will be an option for extra contracts covering the route north of Birmingham subject to ministerial decisions taken later this year.

The contracts form the first tranche of the ‘main works packages’ and span surface routes and tunnels. ‘Tranche 2’ will scope stations while ‘tranche 3’ will cover railway systems. These will be launched in 2016 and 2017 respectively.

Works for the first phase of HS2 will start after the project receives royal assent of the Phase 1 Hybrid Bill currently making its way through Parliament.

RTM revealed in August that the HS2 engineering contracts would be put out to tender in September, after a spokesperson said told us that it would issue invitations to tender for an ‘engineering delivery partner’ (EDP) to provide works valued at £350m.

They also said a second £900m contract for enabling works, such as clearings sites and demolition, would be put out to tender in the autumn.

RTM had revealed that the seven lots of contracts were expected to range between £700m and £1.1bn, totalling £6.4bn – considerably below what Osborne has announced today.

Transport secretary Patrick McLoughlin MP said: “The start of the procurement process for these significant contracts is a major step towards construction on HS2 getting underway in two years’ time and a massive opportunity to help rebalance our economy long before the trains start running in 2016.”

HS2 Ltd chief executive, Simon Kirby, added that the contracts mark a “major milestone” in the project.

“Over the next decade, the winners of these contracts will go on to build 230km of bridges, tunnels and earthworks and create thousands of jobs across the construction industry.

“Together we will transform the intercity rail travel in the UK, build specialist skills and expertise across the country, create at least 2,000 new apprenticeships and build a legacy to inspire the next generation of young engineers.”

Osborne hopes to draw in China’s biggest investors to participate in the project by joining up on bids. He announced a new ‘HS2 partnering day’ where their firms will be encouraged to establish potential partnerships with UK firms in order to deliver deals.

He hopes that this will allow the UK to benefit from Chinese expertise as the world leader on high speed rail, while Chinese investors would benefit from better understanding the national market.

An HS2 ‘regeneration tour’ will also take Chinese companies through key commercial areas in London, the midlands and the north. They will have a chance to meet with local authorities and visit station sites ahead of contract decisions.

Earlier in September, HS2 leaders urged Northern Ireland Companies to bid for the contracts available for the first phase of the project, said at the time to be worth £10bn.

Speaking at an event in Belfast, Northern Ireland enterprise trade and investment minister, Jonathan Bell, said Irish firms have already shown – through Crossrail and the London Olympics – that they have the “skills required to build first class infrastructure”.

Beth West, HS2 Ltd’s commercial director, added that the project would boost jobs and skills across Northern Ireland and was “extremely pleased” that so many local firms had already shown an interest. She encouraged all businesses, large or small, to get involved with the contracts.

And just last week, Birmingham – where the HS2 headquarters is now based – hosted a recruitment drive for more than 100 specialist jobs. HS2 Ltd staff were in the city on 17 and 18 September to discuss the range of opportunities available across civil, rail and site engineering, project management, procurement and contract management, health and safety management, accountancy, law, HR and IT.