HS2 forced to rethink £1.5bn track contract

 

HS2 Ltd has said 'increasing concern' from industry over risk transfer has forced it to reconsider its approach on a £1.5bn track construction contract covering London to Crewe.

It also conceded 'current market conditions are challenging' and is likely to make an improved offer to industry, which showed little appetite for the work.

”Local

HS2 is now hosting an Industry Day on 3 September 'to re-engage with the market and launch its revised strategy based on market appetite and conditions'.

The OJEU notice it had published for the works states: 'HS2 have recognised the current market conditions are challenging and the increasing concern regarding risk transfer and have therefore revised our position to provide a better balance and overall outcome.

'The industry day will provide an opportunity to re-engage with the market and outline our revised strategy which we believe will attract a larger number of bidders, reduce risk and thereby produce a more competitive process.'

The initial contract was huge and covered the design, build, installation and testing and commissioning of the track for the entirety of the route for HS2 Phase 1 and Phase 2a.

An HS2 spokesperson said: 'We are currently revising our approach to the procurement of our Railway Systems contracts in order to increase competition and reduce risk for our contractors. These contracts cover our track and overhead catenary systems as well as tunnel and lineside mechanical and electrical work.

'Taking these decisions now will help us deliver contracts which, in the long term, deliver best value for HS2 and the taxpayer.'

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