After the recent announcement from the Transport Secretary and Department for Transport (DfT) that the works on London Euston’s HS2 terminal and Phase 2a have been deferred, the UK National Audit Office (NAO) published a report that has revealed the costs involved with the project are staggeringly higher than previous reports.
Gareth Davies, head of the NAO said:
“The March 2023 announcement by the Transport Secretary pausing new construction work should now give DfT and HS2 Ltd the necessary time to put the HS2 Euston project on a more realistic and stable footing. However, the deferral of spending to manage inflationary pressures will lead to additional costs and potentially a more expensive project overall, and that will need to be managed closely.”
These cost concerns have led to a recent questioning session by the Parliament’s Public Accounts Committee directed at senior personnel from the project, and from the government’s Department for Transport.
Euston’s budget was originally set at £2.6bn, however it was reported in March 2023 that the latest cost estimate for the 10-platform design is £4.8bn, signifying a staggering rise of over £2.2bn.
The original plans for Euston were a two stage, eleven platform configuration, which has since been changed to a ten-platform single-stage design with single-stage delivery, expected to be a much cheaper option, bringing down a cost pressure of £400m. This cost pressure was initially reported before the revised cost figure of £4.8bn for the total project, yet the £400m estimate was still being reported as recently as last October.
Dame Bernadette Kelly Permanent Secretary at the Department for Transport was questioned by Liberal Democrat MP Sarah Olney, about this discrepancy, where she outlined “the figure of 4.8bn, which is now reported correctly in the NAO’s report, we had no sight of this until, certainly I think within HS2 Ltd, around December 2022 and in the department, it was formally reported to us through February and March 2023.
“Just to be very clear, that number was not at all visible or had not emerged from any of the work at the point in which the last parliamentary report was published on the 27th October.”
Sarah Olney also questioned Mark Thurston, Chief Executive Officer of HS2, about the original redevelopment budget for Euston being £2.6bn, despite original estimations sitting between £3-£3.5bn. Thurston explained that the figure of £2.6bn was a “stretch target” and was agreed to be the budget for the entirety of the HS2 project’s first phase, of which Euston is a major part.
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