UK Government agrees to progress HS2 13 Feb 2020

Lauren Dyson, TunnelTalk

Despite a cost estimate that now stands at £106 billion, the UK Government has agreed to progress the full scope of Phase 1 of the dedicated high-speed HS2 railway project that will connect London with Birmingham. “The Cabinet has given high speed rail the green signal,” said UK Prime Minister Boris Johnson, speaking in the House of Commons. “We are going to get this done.”

HS2 will link London with northern England
HS2 will link London with northern England

Phase 1 of the project comprises 225km of twin highspeed rail track and four new stations: at London Euston; Old Oak Common in west London; an interchange station near Birmingham airport; and a new station on Curzon Street in Birmingham. Legislation for Phase 2a of the project to continue the line from Birmingham Midlands to Crewe is currently awaiting Parliamentary approval, and Phase 2b to connect Crewe to Manchester and join the West Coast mainline just south of Wigan to Leeds is also in planning and design. As part of his HS2 announcement, the Prime Minister said that the Government wants to have a closer look at Phase 2b of the project and establish how it could work with the proposed Northern Powerhouse Railway, which will connect the cities in the North of England.

There has been much criticism surrounding the plans for HS2, particularly with regards to sustainability and the rising costs of the project, which will be funded by the UK taxpayer. When HS2 was first proposed in 2012, the budget was £32.7 billion. This was revised in 2015 to £55.7 billion and in July 2019, an announcement from HS2 Ltd, the organisation set up to design, build and deliver the project, said that an additional £30 billion may be needed to complete the full scope of Phases 1 and 2 of the project (Table 1).

Table 1. HS2 cost increases
Element of cost estimate Cost change since
April 2017
Cost estimate in
October 2019
(£m) (%) (£m)
Main civil construction 4,916 85 10,667
Station design and build 1,020 34 3,984
Railway systems 961 52 2,792
Preparatory works 860 124 1,552
HS2 Ltd costs: HS2 Ltd
Staff and administration
814 35 3,138
On network works (ONW) and
wider network works (WNW)
721 85 1,573
Utility diversions 389 81 869
Land and property acquisition 154 5 3,562
Other 609 180 948
Trains (rolling stock) and
operations and maintenance
-390 -20 1,584
Total 10,054 49 30,669

In response to criticism about the financial and environmental sustainability of HS2, in August 2019, the Government ordered a review of the project chaired by Douglas Oakervee, a former Chairman of HS2 Ltd. The report estimated that the total cost of the HS2 project could now reach £106 billion. Despite this, the 10-member review panel, with the exception of Deputy Chair Lord Berkeley, recommended that the project should proceed as planned. In a letter in November 2019, Lord Berkeley stated that politicians and ministers have had great concerns over the rising costs of the project and that he could not support the conclusions or recommendations of the review panel.

Prime Minister Johnson told the House of Commons on 11 February that the Government will be interrogating the current costs to identify where Phase 1 savings can be in line with the Oakervee panel recommendations. He wants to avoid the costs and delays that would be associated with a detailed redesign, so that HS2 Ltd can focus solely on getting Phases 1 and 2a built on time and on budget.

Construction sections for Phase 1 of the route
Construction sections for Phase 1 of the route

“To ensure that the project continues without any further blowouts on either cost or schedule, we are taking decisive action to restore discipline to the programme,” Johnson said. “There will be changes to the way HS2 is managed.” HS2 Ltd will remain in charge of the railway line between London, Birmingham and Crewe – Phases 1 and 2a – but the Government wants a new organisation to take responsibility for the line on to Manchester and Leeds (Phase 2b), in a bid to bring the overall project in at less than £100 billion.

Reasons for rising costs

A 2019 report by HS2 Ltd identified a number of reasons why Phase 1 is now forecast to cost more than the available funding. One major factor cited is civil construction elements of the railway, such as earthworks, tunnels and bridges. This includes the costs associated with security, design and logistics for contractors, which have turned out to be higher than anticipated. Further, the 2017 estimates for contractor overheads and design costs for the railway stations were based on previous projects and they underestimated how much the HS2 stations would cost.

Table 2. HS2 appointed designers and contractors
Phase 1 station designers
London Euston Arup
Old Oak Common WSP
Birmingham Interchange Arup
Birmingham Curzon Street WSP
Phase 1 station preferred contractors
London Euston Mace – Dragados JV
Old Oak Common Balfour Beatty, Vinci, Systra JV
Phase 1 main line preferred contractors
S1 Euston tunnels and approaches
SCS - Skanska, Costain, Strabag JV
S2 Northolt tunnels
SCS - Skanska, Costain, Strabag JV
C1 Chiltern tunnels and Colne Valley District
Align JV of Bouygues, Volker Fitzpatrick, Sir Robert McAlpine
C2 North Portal tunnels to Brackey
Eiffage Kier JV
C3 Brackley to South Portal of Long Itchington Wood Green tunnel
Eiffage Kier JV
N1 Long Itchington Wood Green tunnel to Delta Junction and Birmingham Spur
BBV - Balfour Beatty, Vinci JV
N2 Delta Junction to West Coast Mainline Tie-In
BBV - Balfour Beatty, Vinci JV
Phase 2b civils design and environmental services:
Lot 1 Mott MacDonald and WSP
Lot 2 AECOM, Capita and INECO
Lot 3 Arup

Other reasons include the cost of railway systems including power, signalling and communications, which are fitted to existing infrastructure. The report states that further development of the design has led to a better understanding of the work required. Site complexity has also been greater than anticipated, as a result of the discovery of asbestos and archaeological remains, and work to modify existing Network Rail assets at Euston and Old Oak Common to enable high-speed services is more complex than originally anticipated.

In its review, the Oakervee panel found that “there has been considerable over-specification and ’gold-plating’ in HS2 contracts with much of the design seemingly done on a worst-case, risk-averse scenario”. It considers this to be a “key driver behind the inflated prices on Phase 1.” The review concludes that these design standards and specifications could be reduced to be less severe without major risk but said there would be a trade-off between cost and schedule and that constraints in the Phase 1 Act that approved construction of the line, and the difficulty in changing it, do not assist the taxpayer. There are opportunities, it states, on Phase 2b to remove gold-plating and over-specification and redesign of alignments.

An increase in the amount of track now running underground is said by HS2 to be an important cost factor. As an example, the twin-tube Chiltern tunnel section has been extended by 2.6km to a total 16km since cost estimates were first developed. An overpass of the A38 near Lichfield on an embankment and viaducts, and part of the route out of London, which was originally going to be in a cut, have also been subsequently moved underground.

Design of new concourse at Euston
Design of new concourse at Euston

Plans for the entire 530km route have been substantially modified as time has gone on, in response to unforeseen site conditions, environmental issues, and issues with land ownership. As an example, parts of the line have been narrowed to reduce the costs associated with acquiring land – both for the railway itself and the construction process.

HS2 has said that everything proceeds within the budget envelope for the project, but that, with progress, more becomes clear about how to build and operate the railway. It states that the largest ground investigation survey ever in the UK has been undertaken and that that will have helped to inform the design of the railway, but that it cannot reveal exactly what to expect underground, particularly in land that has been used for industrial purposes.

Phase 1 of the HS2 between London and Birmingham is currently in development and is scheduled to be operational by late 2026. The designers and preferred contractors for Phase 1 of the project are all appointed and are working with HS2 Ltd to advance the project according to estimates and schedules (Table 2).


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