HS2 already £800m over running cost target

Aaron Morby 4 years ago

HS2 is reporting mounting cost pressure from overrunning enabling works and higher building cost estimates for the London terminus at Euston.

Rising cost pressures on the £40.3bn first phase were revealed in the first report to Government by HS2 Minister Andrew Stephenson.

While the latest projections have risen at an early stage, the forecast is still within the Government’s extended funding envelope of £44.6bn.

HS2 has still to factor in the cost impact of Covid-19, which will be detailed within the next six months.

So far £9.6bn has been spent already, a further £11.5bn is contracted, and £13.9bn is yet to be contracted and remains an estimate.

The target cost also includes a £5.3bn contingency for managing the risk and uncertainty that are an inherent part of delivering major projects.

Of the £800m cost pressure identified so far, around £400m is attributed to enabling works overruns.

Since starting in 2017, enabling works contractors have encountered more significant challenges than anticipated, such as the need to safely remove more asbestos than expected.

More detailed scoping of the Euston Station redevelopment has identified a significant cost pressure, currently reported at £400m.

Stephenson warned that further work is ongoing to validate these initial estimates and this could identify further pressure.

“As this remains at the design stage, work is underway to consider opportunities, efficiencies and scope reductions in order to redress these pressures and we will report further on this in the next report,” he added.

On Phase One, the Delivery into Service date range for initial services from Old Oak Common to Birmingham Curzon Street remains 2029 to 2033.

The report stated: “HS2 continues to predict that it will provide services within this range but notes some pressures on the earliest date from COVID impacts and delayed handovers from enabling works, which it is seeking to mitigate.

“Schedule estimates will be more reliable once the main works are fully mobilised next summer and once the Rail Systems elements have been contracted.”

Initial opening of services from Euston remains 2031-2036, subject to further work on the study of design and delivery options.

Latest news

Mace confirmed on £100m London office retrofit

Work underway on Helical's 100 New Bridge Street job near Ludgate Circus
6 hours ago

Wylfa chosen for next big nuclear power station build

Government names Anglesey site for a large-scale gigawatt nuclear power plant.
9 hours ago

Bowmer & Kirkland trading profit halves

Contractor buys HVAC specialist Adcock despite challenging market
10 hours ago

Piling specialist Van Elle plans further job cuts

Piling specialist plans further cost savings in face of lower demand
11 hours ago

Civils contractor A Catlow files administration notice

High voltage cable specialist lodges court notice
10 hours ago

Green light for ARC Oxford lab campus

Work to start later this year on £40m Ascent building job
11 hours ago

Stonehenge tunnel hit by another legal delay

Court upholds latest appeal against £1.7bn scheme by campaigners
1 day ago

Plans go in for huge Olympic Park construction hub

Bow Goods Yard could deliver 3.5m tonnes of materials a year to sites across London
1 day ago

40% affordable homes target for Labour’s new towns

Labour pledges to select new town sites by end of first year
1 day ago

Plan for £100m Liverpool Baltic station

Construction work could begin next year
1 day ago

Surgo Construction went down owing £4.5m

Biggest creditor is Bellway Homes after dispute on housing job
1 day ago

Vistry seals £157m West London housing deal

Around 575 homes to be built at Merrick Place scheme in Ealing
1 day ago

Streamlined Watkin Jones returns to profit in first half

Multi-room specialist sees secured work pipeline hit £1.4bn
1 day ago

Bellway hires ex-brickie as group construction chief

James Griffin to oversee move to the Future Homes Standard and timber frame.
1 day ago

Persimmon under fire for delays to £10m relief road

West Suffolk Council serves Breach of Condition Notices after timetable slips again
1 day ago

BAM wins £33m Kent secondary school job

Replacement Swanley academy to be built at live school site
1 day ago

Aluminium cladding specialist collapses

Melton Mowbray-based firm worked for several main contractors
2 days ago

Brickwork contractor Lee Marley returns to profit

Affordable and rental homes demand lifts brickwork contractor
2 days ago

Housing contractor Durkan suffers second year of losses

More fire safety provisions tip firm into £3.9m loss
2 days ago

Farrans makes breakthrough on tricky tunnel job

Tunnel under Tees latest part of new £155m water pipeline job
2 days ago

Heidelberg buys aggregates and earthworks specialist B&A

Latest deal follows acquisition of Mick George
2 days ago

Flagship biodiversity net gain scheme flawed

NAO warns Government's flagship green development scheme at risk of failure
5 days ago

Plan in for £3bn Lincolnshire mega data centre

3.3m sq ft Humber Tech Park will be one of Europe's largest data centres
5 days ago

Green light for Digbeth 1,300 homes scheme

Warner’s Fields scheme to start with excavation and landscaping of the River Rea
5 days ago

£210m M3 Junction 9 upgrade gains consent

VolkerFitzpatrick to start work in early 2025 on Winnall roundabout, near Winchester
5 days ago

United Living wins 14-year L&Q homes repairs deal

Trafford housing upkeep deal worth £205m
5 days ago

£400m Lewisham resi-led scheme advances

Land deal paves way for Amro Partners' 1,000-home London scheme
5 days ago

McLaren gets go-ahead for Grade II listed Leeds student scheme

Springfield House to be revamped and two new wings added
5 days ago

Piling giant to fit people alarms on all rigs

Cementation Skanska upgrades site safety systems
5 days ago

Vistry to make £800m profit after subcontractor cost cuts

House builder bullish about shareholder returns after asking suppliers for discounts
6 days ago

Contractor services