The transport secretary has launched an ‘independent review’ to try to bring the cost of the rump HS2 project under control.
Louise Haigh said the extent of the challenge inherited on HS2 has become clear, with costs being allowed to spiral out of control and failure to deliver to budget.
The Department for Transport said the incentives of the main HS2 contractors are also being reviewed, ‘which could lead to some contracts being renegotiated or amended’.
It said the cost of what was previously called Phase One has soared, ‘due to poor project management, inflation and poor performance from the supply chain, without sufficient explanation of what is to be done to deliver to budget’.
The Major Transport Projects Governance and Assurance Review will ‘ensure lessons are learned to support action and to ensure that the costs for HS2 are brought under control’.
It will be led by senior infrastructure delivery advisor James Stewart and will investigate the oversight of major transport infrastructure projects, including the effectiveness of forecasting and reporting of cost, schedule and benefits, as well as actions to deliver cost efficiencies.
Construction work on the HS2 station at Curzon Street, Birmingham
The review will primarily draw on experiences of HS2 to date to ensure recommendations and learnings are applied to its delivery as well as to future projects, officials said. It will present recommendations back to the Government this winter.
The Government is also reinstating ministerial oversight of the project, with regular meetings starting immediately, where both Ms Haigh and rail minister Lord Hendy alongside the chief secretary to the Treasury, will ‘challenge delivery and remove obstacles to securing the full benefits of the railway more cost effectively’.
Ms Haigh said: ‘It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming transport secretary I have seen up close the scale of failure in project delivery – and it’s dire.
‘Taxpayers have a right to expect HS2 is delivered efficiently and I won’t stand for anything less.’
The DfT pointed out that a new chief executive, Mark Wild will shortly take over HS2 Ltd, and said Ms Haigh will task him with assessing the current position on cost, schedule and culture, and providing an action plan to deliver the remaining work as cost effectively as possible, including at a realistic budget and schedule.
It said the Government recognises concerns about connectivity between Birmingham and Manchester but has been clear it is not resurrecting Phase 2 of HS2, which was cancelled by the previous government.
Ministers have however said that an announcement will be made soon about connecting the high speed line from Old Oak Common, where it is currently due to terminate, to Euston in central London.
