‘Successful delivery’ of HS2 ‘appears to be unachievable’ says IPA

Economy Policy & Politics

A leaked government report has put the multi-billion HS2 project into fresh doubt.

The official watchdog for the high-speed railway – the Infrastructure and Projects Authority (IPA) – has warned the “successful delivery” of the project “appears to be unachievable”, according to a report by the Telegraph.

Construction journal Building reported earlier this week that HS2 has been labelled “unachievable” in the IPA’s assessment of the  government major projects portfolio (GMPP).

It is one of eight major construction projects across the country to have been given a “red” rating by the IPA, states Building – which has been reporting for the industry for more than 170 years.

A red rating is given to projects the IPA “thinks need to be re-scoped or reassessed entirely” due to various factors including timescale, budget, quality or the benefits of delivery.

HS2 has already been drastically scaled back. The planned eastern link to Leeds has been scrapped completely and the link to central London has been mothballed. Transport secretary Mark Harper announced earlier this year the suspension of work to Euston Station after costs for the terminus spiralled from £2.6 billion to £4.8. It is believed the delay will be for eight years meaning HS2 services aren’t expected to arrive at Euston until 2041.

The BBC reported two weeks ago that the cost of HS2 has shot up from a projected £33 billion in 2010 to “at least” £71 billion. Other estimates have put the cost at over £100 billion.

The original budget for the whole project  – including the eastern spur that was abandoned in 2021 and the Euston link – was set at £55.7 billion in 2015. However, the cost to get to Crewe alone –  without accounting for phase 2b – is now estimated to be between £53 billion and £61 billion. That is at 2019 prices, since when the economy has been hit with high inflation.

HS2 claims to be Europe’s largest infrastructure project and “the biggest rail investment ever made in the North of England”, creating “Britain’s new zero carbon, high-speed railway, and the UK’s flagship transport levelling up project.”

More than 250 miles of high-speed track is planned, connecting England’s north west to the south east. Phase one of the plan links London and Birmingham. Phase 2a extends the line to Crewe and phase 2b takes it to Manchester. HS2 East plans to link the West and East Midlands “with services to Sheffield and Leeds”. Northern Powerhouse Rail plans to have a high-speed rail link between Warrington and Yorkshire relying on HS2 Phase 2b infrastructure.

The government has committed funding for phases one and 2a with 2b’s funding under review.

Royal assent was granted for phase one in February 2017. It took a further three years and two months for the “Full Business Case  for phase one to be approved. A budget of £44.6 billion plus a £9.6 billion contingency – based on 2019 prices – was set with projected delivery from 2029 to 2033. The plan includes a link to Euston Station and eastern link – the former is now suspended and the latter has been scrapped.

Phase 2a was granted royal assent in February 2021 with a budget of between £5.2-£7.2 billion (in 2019 prices). Earlier this year Harper said higher inflation means there will be two year delay to the Birmingham to Crewe stretch of the railway.

Phase 2b remains under discussion.

As pressure grows over the ballooning costs, HS2’s longest serving chief executive Mark Thurston announced he is stepping down from the £617,000 per year position in September and said the project is moving into a “defining period”.

“The next 18-24 months will see the project move into an exciting new stage,” said Thurston. “I have agreed with the board that someone else should lead the organisation and programme through what will be another defining period for HS2.”

In 2020 a Chinese company offered to build the entire project in five years at a cost of around £56 billion.

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