Leaked HS2 report claims scheme ‘fundamentally flawed’ - FT

Leaked HS2 report claims scheme ‘fundamentally flawed’

Rail project in ‘precarious position’ and may exceed £56bn budget by as much as 60%

• Successful delivery appears unachievable, says report’s author
  
• Project hit by series of controversies
• Scores of people yet to receive compensation
  

Racing through the countryside at 250mph, the planned new high-speed train line from London to the Midlands and northern England should be one of the fastest in the world. But it is also set to be one of the most expensive.

A leaked document prepared for the government’s Infrastructure and Projects Authority warned shortly before the High Speed 2 railway was approved by parliament in February 2017 that the scheme was “fundamentally flawed” and would overshoot its £56bn budget by as much as 60 per cent.

The December 2016 document, marked “sensitive” and “not for publication”, said Europe’s biggest infrastructure project was in a “precarious position” and would be “classified as ‘failed’ by any internationally recognised definition”.

It added that HS2 was “highly likely to significantly overspend, 20 to 60 per cent”, which would increase the cost to as much as £90bn.

The project management capabilities of HS2 Ltd, the taxpayer-funded company charged with building the railway, had fallen “well short of best practice”, and its executive team lacked “cohesion and common vision”, said the document.

It called for “greater transparency and frankness” about the timeline, costs and benefits of HS2, which will run from London to Birmingham in its initial phase, and later to Manchester and Leeds.

‘The government clearly misled parliament’ Tony Berkeley, a Labour peer and former engineer who worked on the High Speed 1 railway between London and the Channel tunnel, said: “The government clearly misled parliament by hiding this devastating report on HS2’s performance and cost overruns.

“If parliament voted for HS2 on false premises that calls into question the legitimacy of the project.”

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HS2 costs taxpayers £4.1bn before work even begins


Treasury agency rates project at high risk of not delivering value for money

Britain’s HS2 high-speed railway project has cost taxpayers £4.1bn even before construction has started, according to an analysis of the state-funded organisation’s accounts.

The fast-rising cost of the railway line, which will run from London to Birmingham in its £24bn first phase, and then to Leeds and Manchester, was revealed in its annual report, which was slipped out earlier this week.

It showed expenditure on HS2 Ltd, the company set up to build the train line, rose from £497m last year to £1,143m in the year to March. This took the total since 2009 to £2.5bn, according to the Financial Times’s analysis of the project’s accounts.

The cost of requisitioning land and property for the planned line is not included in the accounts, and is to be released separately by the Department for Transport. But answers to parliamentary questions have shown that this amounted to around £1.6bn so far, which together with the £2.5bn, takes the total to £4.1bn so far — almost half the cost of HS1, linking London to the Channel tunnel.

The 2017-18 figures included around £600m spent on consultants, including engineering advice. Staff costs accounted for £124m while there were also 15 relocation payments for staff moving from London to Birmingham, totalling £167,000.

Martin Blaiklock, an infrastructure consultant, said the £4bn represented around 8-10 per cent of estimated project costs, which he said was “somewhat high” for this stage of project planning, indicating that the final project cost would be “rather higher than expected”.

The figures exclude at least £6.6bn of contracts awarded to construction companies, which had included the collapsed contractor Carillion, ahead of work starting next year. Around 80 per cent of the land and property needed for London to Birmingham has also yet to be bought.

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