Grant Shapps the Transport minister has said phase one of the HS2 high speed railway from London to Birmingham could face a delay of up to five years.
Phase one was expected to be operational in 2026, but now it could well be ready between 2028 and 2031. Shapps said the cost of HS2 has jumped from £62bn, to between £81bn and whopping £88bn.
Shapps said in a statement, “Colleagues will see that the chairman of HS2 does not believe that the current scheme design can be delivered within the budget of £55.7bn, set in 2015 prices.
“Instead he estimates that the current scheme requires a total budget, including contingency in the range of £72bn to £78bn, again in 2015 prices.
“I therefore think it is worth also updating the House in current prices. Adjusting by construction cost inflation, the range set out in Allan Cook’s report is equivalent to £81bn to £88bn in 2019 prices, against a budget equivalent to £62.4bn.”
Allan Cook, chairman, said HS2 is the “right strategic answer” for the UK, but the entire business model “needs to be reset.”
He said, “The original plans did not take sufficient account of the compound effect of building a high-speed line through a more densely populated country with more difficult topography than elsewhere, and doing so whilst complying with higher environmental standards.
“Equally, the existing cost/benefit model, which was designed for smaller scale schemes, has proved inadequate in capturing the full transformational effect of HS2, particularly on changing land values. This transformation is already being demonstrated in Birmingham.
“Therefore, the budget and target schedule for the programme have proved unrealistic, while at the same time the benefits have been understated.”
Cook added, “Given the above, the budget, schedule and business model for HS2, as well as the way it interfaces with the rest of the rail network, need to be reset, reflecting the different maturity of the phases to ensure the programme delivers the greatest possible benefit for the country in the most cost-effective way.”
A spokesperson for HS2 said, “The report by our chairman Allan Cook is an assessment of the current status of the HS2 programme. It examines the comprehensive and far-reaching benefits of HS2 for the country, which are more significant than those previously taken into account. It also examines the challenges facing the project.
“It sets out a rigorous cost and schedule range for delivery of the programme under its current scope.
“The assessment makes clear that HS2 remains a compelling strategic answer for Britain’s future transport needs, relieving overcrowding and congestion on our roads and railways, and reducing the carbon footprint of the UK.
“It will drive economic growth and regeneration in our regions, and bring Britain closer together.
“The assessment of phase one is based on the significant work carried out so far, which has given us detailed insight into the scale and complexity of the programme. The assessment of phase 2b takes into account lessons learnt on phase one.”