HS2 facing £800m ‘cost pressures’
HS2 is at risk of running £800m over budget as a result of overruns on enabling works, the challenge of removing more asbestos than anticipated, and £400m worth of ‘significant cost pressures’ at Euston Station following further development of the baseline scheme.
That’s according to HS2 minister Andrew Stephenson, who has written a report updating Parliament on the high-speed railway’s progress.
Main construction work on the first phase of HS2 began in spring this year after the full business case for the line between the West Midlands and London, including an increased budget, was approved.
The total funding for phase one was set at £44.6bn (based on 2019 prices) with an estimated cost for completing the full network of £72bn-£98bn.
HS2 has projected an outturn cost of £40.3bn for phase one, which it said remained “uncertain” and did not yet reflect the impact of covid-19.
Of the £40.3bn, £9.6bn has been spent to date and a further £11.5bn contracted, with £13.9bn yet to be contracted. There is also a contingency of £5.3bn for managing the risk and uncertainty inherent in delivering major projects. The report said that the £800m worth of cost pressures would be drawn against this contingency.
On phase one, the “delivery into service range” from Old Oak Common to Birmingham Curzon Street remains 2029 to 2033.