Ministers told first stage of HS2 may cost another £800m

The HS2 money pit: Ministers are told first stage of high-speed rail line may cost another £800m… six months after a budget increase saw total costs soar by £20.6bn to £43billion

  • Phase One between London and Birmingham could cost £800million more
  • Half for route preparation bringing ‘more significant challenges’ than expected
  • Another £400m issue identified during development of designs for Euston

Ministers have been told that Phase One of controversial rail line HS2 could cost £800million more than planned.

It comes just six months after a budget increase saw total predicted costs for the first stage of the high-speed line soar by £20.6billion to £43billion.

In a written statement to Parliament, HS2 Minister Andrew Stephenson said half of this figure is due to preparation of the route for construction involving ‘more significant challenges than anticipated’.

This includes the need to remove more asbestos than expected.

Another ‘significant cost pressure’ worth £400 million has also been identified during the development of designs for Euston station.

Mr Stephenson warned that further investigation is being carried out which ‘could identify further pressure’.

Ministers have been told that Phase One of controversial rail line HS2 could cost £800million more than planned. Pictured: HS2 Minister Andrew Stephenson

The HS2 route would initially link London and Birmingham with the second phase of the project then heading north to Manchester and Leeds

HS2 would allow trains to travel at speeds of up to 250mph. That would mean much faster journeys between key UK cities. The graphic shows times for HS2 passengers (in red) verses the current times (in blue)

What is HS2 and how much will it cost

HS2 (High Speed 2) is a plan to construct a a new high-speed rail linking London, West Midlands, Leeds and Manchester.

The line is to be built in a ‘Y’ configuration.  London will be on the bottom of the ‘Y’, Birmingham at the centre, Leeds at the top right and Manchester at the top left. 

Work on Phase One began in 2017 and the government plans envisage the line being operational by 2026. 

The HS2 project is being developed by High Speed Two (HS2) Ltd. 

The project ‘s costs have risen sharply from an initial £32.7billion in 2010 to a projected cost of £56billion last year. A review recently estimated that the cost could hit £106billion, with some extreme projections suggesting it could hit £150billion.  However, the government’s forecast is between £72billion and £98billion.

In November 2013, the estimated cost for the first stage of HS2 stood at £19.4billion, according to figures calculated in a parliamentary session.

In April, a full business case was approved which saw a target cost of £40billion in 2019 prices – a rise of £20.6billion.

A spokesman for the Department for Transport said HS2 Ltd is still expected to deliver Phase One at the ‘target cost’ of £40.3 billion.

The project as a whole has seen spiralling costs – from the projected £36billion in 2012 to an estimated £106billion now.

The ‘funding envelope’ for Phase One is £44.6 billion, which includes a contingency of £4.3 billion retained by the Government.

The DfT spokesman added: ‘As construction continues, this Government remains relentlessly focused on controlling costs, to ensure this ambitious new railway delivers its wealth of benefits at value for money for the taxpayer.’

Boris Johnson decided to proceed with HS2 in February despite fears over its cost, schedule and impact on the environment.

In September, Mr Johnson heralded the HS2 rail link as an engine for job growth as construction finally begins.

Given the go-ahead on January 10, 2012, Europe’s largest infrastructure project last month moved from enabling works to full construction – with shovels finally going in the ground.

The Prime Minister says it will create 22,000 jobs. 

Boris Johnson has heralded the controversial HS2 rail link as an engine for jobs growth as construction finally begins

But many of his own MPs – especially those with constituencies on the route – are deeply against the expensive project. 

And its chief executive, Mark Thurston, takes home more than four times the Prime Minister with £659,416.

Last month, Mr Thurston said: ‘The reality of high-speed journeys joining up Britain’s biggest cities in the North and Midlands and using that connectivity to help level up the country has just moved a step closer.’ 

Mr Johnson said: ‘HS2 is at the heart of our plans to build back better – and with construction now formally under way, it’s set to create around 22,000 new jobs. 

‘As the spine of our country’s transport network, the project will be vital in boosting connectivity between our towns and cities.

‘But HS2’s transformational potential goes even further. 

Given the go-ahead on January 10, 2012, Europe’s largest infrastructure project will today move from enabling works to full construction – with shovels finally going in the ground

‘By creating hundreds of apprenticeships and thousands of skilled jobs, HS2 will fire up economic growth and help to rebalance opportunity across this country for years to come.’

HS2 Ltd and its main contractors expect to recruit for around 22,000 roles in the coming years to build the phase one route. 

These will include 7,000 jobs in the West Midlands, more than 4,000 building the section from the Long Itchsington Wood site in Warwickshire south to the Chilterns, and 10,000 in the Greater London area.

And HS2 Ltd itself is already directly recruiting for 500 roles over the next three months, with the majority based in Birmingham.

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