UK Government tightens oversight on HS2 amid soaring costs

An aerial view of early progress on the construction of the V-shaped piers for the Curzon No 3 viaduct in Birmingham, UK (Image: HS2)

The statement said that to achieve positive change, “the government is also reinstating ministerial oversight of the project to ensure greater accountability.

“This will see regular meetings starting immediately, where both the Transport Secretary and Rail Minister, Lord Peter 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.”

Recently, UK media reported that it was ‘unclear’ whether the expansive and troubled scheme was in the red £10 billion or £20 billion (around US$13 billion or $26 billion).

The UK government said years of poor project management, inflation, and poor supply-chain performance were compounded by insufficient explanations on “what is to be done to deliver to budget.”

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What’s next for the UK’s HS2 project?

UK Secretary of Transport Louise Haigh (Image courtesy Labour Party)

The UK Secretary of State recently announced an independent review of the project, specifically on Phase 1 (Birmingham to London). The statement confirmed that, at present, the government has no interest in resurrecting what was once known as Phase 2 of the programme (Birmingham to Manchester line).

Secretary 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.”

The Major Transport Projects Governance and Assurance Review will be led by senior infrastructure delivery adviser, James Stewart, and will present recommendations this winter, the central government said.

“It 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. 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,” added the government.

Separately, incentives of the main HS2 contractors are also being reviewed, which could lead to some contracts being renegotiated or amended, the government noted. A joint venture of Balfour Beatty Vinci were awarded the main contract in 2020.

Prior to dropping the Phase 2 northern leg, the entire HS2 project was expected to cost well more than $100 billion. The shortened version is estimated to cost more than $80 billion.

The project is expected to finish in 2033. 

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