HS2 costs soar once again, chairman confirms

HS2 costs soar once again, chairman confirms

HS2 costs have ballooned to £66.6 billion, the transport committee has heard this morning.

In a session, the committee learnt from HS2 Ltd’s executive chairman, Sir Jon Thompson that the estimated costs for Phase 1 are conservatively estimated at between £49 billion and £56 billion however, should be adjusted upwards of “somewhere between eight and 10 billion pounds.”

This is a significant increase on the original estimated cost which was priced at £37.5 billion in 2013 for the delivery of the whole planned line, including Phase 2 from Birmingham to Manchester which was scrapped in October 2023.

At the committee meeting held this morning, Thompson said there were several reasons as to why the costs have dramatically increased.

Thompson said “This is a systemic problem. It’s not just about HS2, it’s about large projects that the Government funds.

“The budget needs to be set early on in order for an outline business case to be approved by the Government, sometimes by Parliament.

“At that point, people think OK the original estimate for Phase 1 was £30 billion-something.

“That is based on very, very immature data. You don’t have a design, you haven’t procured anything, there is no detail on which you can cost anything.”

He added: “If you say to a builder, can you give me a quote for an extension, they walk around and say ‘it’s £50,000-something’.

“But then you get into the detailed design, you know exactly how big it is, what surfaces you want, how much concrete needs to be poured. Unsurprisingly you get a better number.

“That’s the situation here. The situation with HS2 in my opinion is the estimate was poor, the budget was set too early, and then when you get further into it, you get much better information.

Thompson did give an operational update on the progress of HS2. Thompson revealed that civil engineering on Phase 1 was passed the 50% mark and noted that the next couple of years would see the project enter a phase of ‘peak engineering’.

He also confirmed that Old Oak Common station was also over 50% complete whilst also being in a position to award a contract for the construction of Birmingham Interchange station later this year.

Photo Credit: HS2

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