HS2 Phase One costs remain a concern as inflation continues to bite

HS2 Phase One costs remain a concern as inflation continues to bite

The UK government remains concerned about the increase in costs for completing the first phase of High Speed 2 (HS2).

In a report on recent progress of HS2, rail minister Huw Merriman confirmed that the construction at Euston and Old Oak Common was to be  to delayed for two years in order to reduce costs.

He also confirmed in the report that Phase 2b that is planned to run from West Midlands to Crewe will also be delayed for two years, with spiralling costs blamed for that also.

Mr Merriman also clarified that HS2’s Executive and Board are currently reviewing the cost estimates for completion of Phase One, noting that the current pressures and emerging costs mean that unless mitigated, the initial cost of £46 billion will be exceeded.

Those costs are brought into stark focus as the report confirms that the latest proposed target cost for Euston station is £4.8 billion, an increase of £2.2 billion on HS2 Ltd.’s original budget and higher than the previous design cost. The intricacies and difficulties of building a new HS2 station at Euston has contributed to those costs alongside higher-than-expected levels of inflation.

The cost pressures currently on the project has prompted HS2 to push back delivery on Euston station whilst it reviews and redesigns the Euston station design. The report also confirmed that partnering with the private sector in order to hit the delivery date for Euston station was also being explored.

Progress on Phase 2a has also stalled, with the government not confirming when they now expect the phase to be ready for service. Early groundworks had been started, however they have now stalled while designs are revisited.

Elsewhere in the report, Mr Merriman re-committed to HS2 East, which is in its development stage currently. HS2 East is planned to run between the West Midlands and the East Midlands, serving Nottingham and Sheffield, working in conjunction with Network Rail as they continue to roll out the Midland Mainline electrification.

Photo Credit: HS2 Ltd.

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