HS2 could cost £106 billion, says leaked review

Fresh doubts have been cast on the future of the HS2 line between Birmingham and Manchester – as the estimated cost of the project rose to £106 billion.

An inquiry led by former HS2 Ltd chairman Doug Oakervee has reportedly found there is “considerable risk” that the high-speed rail project’s cost will rise by up to 20 per cent.

That will take it way beyond the £81bn to £88bn range set out in a report by current HS2 chairman Allan Cook just four months ago.

And it will be almost double the £56bn HS2 was allocated in 2015.

Mr Oakervee’s review recommends that work on phase 2b of HS2 from the West Midlands to Manchester and Leeds should be paused for six months to investigate if it could be a mix of conventional and high-speed lines, according to leaked documents.

The review concluded that the Government should “on balance” continue with the 250mph railway, which would initially go from London’s Euston station to Birmingham and then to Leeds and Manchester by 2040, but that this is subject to “a number of qualifications”.

It said “further work” is needed to assess HS2’s impact on regional growth, and warned it is “hard” to say what economic benefits will result from building it.

“Transport investment alone will not ‘rebalance’ the UK economy,” the review adds.

Transport Secretary Grant Shapps appeared to hint at a change in the HS2 plan on Friday, when he told the Express & Star that the West Midlands would flourish regardless of whether the Government decides to press ahead with the controversial line, which has been under review due to concerns over its spiralling costs and impact on the environment.

He said a decision was due “shortly” on the future of the route, which is is set to carve through 45 miles of Staffordshire countryside and see around 260 HGVs travel along the A51 and A525 at Woore on the Shropshire border..

Mr Shapps said he was “taking advice” from experts on current HS2 contracts, amid concerns that some had risen drastically in cost.

“I’m clear that HS2 has to deliver value for money for the taxpayer,” he said. “It has to provide a return so we get more out than we put in.”

Greater Manchester Mayor Andy Burnham described the leaked HS2 report as “quite worrying” and claimed the use of conventional lines in the North would be a “second-class option”.

He said: “It’s the same old story. London and the South gets whatever it wants, and it’s all about penny-pinching in the North.

“I would say this to the Prime Minister and the Government today: This is your first big test of your commitment to the North of England and we’re watching very closely.

“In my mind there’s no justification at all for doing one thing between London and Birmingham, and doing something different in the North.

“If you’re going to do it, do it properly. Don’t do it by halves.”

'Irreparable damage'

Several construction bosses have claimed scrapping the project would cause “irreparable damage” to the industry.

The chief executives of Balfour Beatty, Skanska and Morgan Sindall were among the signatories to a letter to Boris Johnson, seen by The Times, which urged him to approve the scheme and noted that it would take “many years to get an equivalent pipeline of work in place” if HS2 was cancelled.

But a group of more than a dozen Tory MPs will reportedly meet the Prime Minister in the coming days to urge him to block HS2 and spend the money on other projects.

Mr Johnson is expected to decide within weeks whether to go ahead with construction on the first phase of what would be Europe’s largest infrastructure project.

The review said savings to the £106bn figure could be made by having the private sector contribute to funding HS2 stations, lowering specifications and improving the “cost performance of the management”.

It also stated that no other high-speed line in the world runs 18 trains per hour, and recommends reducing HS2’s frequency to 14.

£8 billion has already been spent on the project.