HS2 potential construction cost pressures hit £1.2bn

Grant Prior 3 weeks ago
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A slower than expected start to main civils works has created more potential cost pressures of up to £1.2bn at HS2.

Phase one works are budgeted to cost £40.3bn with a government-retained contingency of £4.3bn.

But HS2 minister Andrew Stephenson has revealed further “cost pressures” in his latest six-monthly report on the project to Parliament.

Stephenson said £400m of extra costs are looming “predominately due to slower than expected mobilisation of main works civils contractors, associated with delays to approvals of designs, planning consents, protestor action and some Covid-19 impacts.”

These are on top of previously identified extras of £400m for work at Euston station and £400m more to be spent on enabling works.

Stephenson said the extra money would come from a £5.6bn contingency fund set aside for HS2 phase one.

His report added: “Other pressures will arise as the programme progresses, some of which may crystallise into additional costs that will need to be covered from the contingency within the existing budget, and some of which will be mitigated or avoided.”

HS2 bosses are currently looking at ways of keeping a lid on Euston Station costs including building it in a single construction stage and potential design changes.

So far on phase one around £11bn has been spent to date, including land and property provisions. Approximately £12.6bn has additionally been contracted, with the remaining amount yet to be contracted.

A DfT spokesperson said: “HS2 Phase One remains within its schedule and budget. Delivering a major project on the scale and ambition of HS2 will always be challenging but, as mentioned in today’s Parliamentary Report, current cost pressures are well covered within our existing budget.

“This project is at the heart of our plans to build back better, supporting more than 15,000 jobs and 500 apprenticeships. We are committed to a tight control of costs and HS2 Ltd continues to identify areas across the project where savings and efficiencies can be made.”

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