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HS2 in balance as government reviews rail scheme’s costs and benefits

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Prime minister Boris Johnson has launched a review into the HS2 rail link, primarily looking at how much it would cost to continue to build, ahead of a ‘go or no-go’ decision before the end of the year

The investigation will look at the costs and benefits of the high-speed railway scheme linking London, the Midlands and northern England, with transport secretary Grant Shapps refusing to rule out scrapping the project altogether. Though the scheme’s budget was previously announced as £56 billion, Johnson recently warned that costs could exceed £100 billion.

It is understood that £7 billion has already been spent on preparation for the line.

The mammoth project is currently being worked on by various architects and engineers. These include Grimshaw and Arup, which have designed two HS2 stations in the West Midlands and the Euston extension as part of the route’s intended first phase which had been due to start running in 2026. Last year it emerged that Foster + Partners was working on designs for Leeds’ proposed HS2 station.

In February, WilkinsonEyre and engineer WSP revealed new images of their proposed Old Oak Common HS2 and Crossail interchange, billed as the ‘best-connected rail station’ in the country. Four months later the Old Oak and Park Royal Development Corporation (OPDC) warned that the wider area’s £1 billion development was ‘completely dependent on politicians nailing HS2’.

According to information released by the Department for Transport this morning (21 August), the new review will consider:

  • whether costs were realistic in HS2’s business case;
  • whether the assumptions behind the business case were accurate;
  • how much it would cost to introduce changes to scope including running slower trains, making Old Oak Common the main terminus for London rather than Euston, building only phase one (to Birmingham), or changing the phasing of the second (northern) phase;
  • what the costs of scrapping or drastically changing the project would be.

The review will be chaired by former HS2 chairman Doug Oakervee, a civil engineer who chaired Crossrail between 2005 and 2009. He will work with Labour peer and vocal HS2 critic Tony Berkeley.

According to the BBC, Shapps had asked the review team to ‘just give us the facts’. He added: ‘Go and find out all the information that’s out there … genuinely what it would cost to complete this project, and then we’ll be in a much better position to make that decision – go or no-go – by the end of the year.’

Oakervee said: ‘The prime minister has asked me to lead this important review into the HS2 programme.

‘I am looking forward to working with my deputy, Lord Berkeley, to advise the government on how and whether to progress with HS2, based on all existing evidence.’

Berkeley told the AJ’s sister title Construction News earlier this month: ’A six-week review can only scratch the surface but should be able to reach a conclusion as to whether the project is now so toxic that it should be scrapped or whether parts should be built, but to a much lower specification and cost.’

The terms of the review released today do not say the review will last six weeks, instead stating that the panel will submit a final report in the autumn.

Other members involved in the review include backers of the project, such as West Midlands Metro mayor Andy Street.

Street said: ‘This review means we have to make the business case for HS2 again and win the argument, which I am more than confident of doing.

‘HS2 is mission-critical for the West Midlands as it will free up the capacity we so desperately need on our existing railways, drive huge economic growth, and is already creating jobs and building new homes in the region.’

The review will examine issues such as ‘the direct cost of reprioritising, cancelling or de-scoping the project’, including contractual penalties, the risk of legal action, sunk costs, remediation costs and supply chain impact. 

  • 3 Comments

Readers' comments (3)

  • So only now Boris Johnson is aware of sunk costs fallacy and the possible issues of pushing ahead with a controversial huge development with skyrocketing costs and increasingly complicated legal processes.

    #GardenBridge

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  • With two down, one to go fingers and toes crossed. First the Garden Bridge now increasingly likely HS2, the third, cancelling Brexit, is the ultimate and most valuable prize. Perhaps then the country can get round to building the homes, schools, affordable infrastructure including bridges and railways that are needed for a modern developed North European country, and protect the environment and lead on climate change initiatives across the globe, and re-balance the economy and provide employment opportunities for the benefit of the North and Midlands and keep the Union, and change the voting system to be more inclusive and representative.

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  • First, comparing HS2 with the Garden Bridge is plain silly - the latter was a cynical vanity project conducted by two senior political cronies
    One, the Chancellor of the Exchequer, was preaching rigorous austerity and hacking at a wide range of worthwhile government budgets while helping finance the folly, while the other - our current Prime Minister at the time of writing - was busy suborning the TfL organisation while Mayor of London to help 'fix' the creation of the folly, and also poured public money into it.
    HS2 is as much - and probably more, in the long run - about creating extra rail capacity on the increasingly overcrowded north-south 'spine' as it is about higher speeds and shorter journey times.
    Brave words from Simon Carne, but Brexit already seems to have cost the country enormous sums of money - and though I can't defend the cost over-runs on HS2 I suspect Boris & Co will consider them a good excuse for messing with the project to help fund Brexit - which on financial criteria would surely be the better candidate for cancellation.

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