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  • You are here:HS2

HS2 'in discussions' with contractors over costs gap

HS2 chief executive Mark Thurston has told the CN Summit his organisation is “in talks” with contractors to reduce costs and keep the project within its £55.7bn budget.

Speaking on day one of the Summit, Mr Thurston said he could not comment publicly on reports of rising costs.

However, he admitted that the true costs of all aspects of HS2 were not fully understood prior to contractors being appointed.

Mr Thurston said: “There is a budget for HS2 and […] the company I run has been clear that it has to deliver the railway for that number. I don’t subscribe to the idea that it is over budget.

“When you think of when the budget was set for phase one in particular, which was in 2015, we always maintained that until we put contractors into play, we would not understand the true cost.

“We are sitting with our contractors as we speak to close that gap and I won’t comment on the size of that gap.”

The chief executive was positive over the project’s ability to come in within budget.

“[It’s a question of] how do we make best use of the capability that we have?” he said.

“I am confident that we will get back to the funding envelope that the government can afford.”

In July 2017 CN revealed that HS2 has awarded its phase one civils packages, budgeted at £6.6bn, to joint ventures involving Balfour Beatty, Bouygues, Costain, Eiffage, Kier, Sir Robert McAlpine, Skanska, Strabag, Vinci and VolkerFitzpatrick.

Last weekend the Sunday Times reported that HS2 could be delivered more than a year late and over its £55.7bn budget.

In July HS2 pushed back the start date for phase one civils construction from March to June next year to give contractors more time to finalise their designs.

It marked the second time that works had been pushed back, with phase one civils having originally been due to begin this month.

On Monday HS2 announced the works package to deliver Birmingham’s Curzon Street station, which is valued at up to £435m.

Questioned by journalist and CN Summit moderator Declan Curry, Mr Thurston said the decision to delay the start of civils works was made to allow HS2 to work through any complexities in the design.

Mr Thurston said: “I am relaxed about spending longer in stage one’s design and development phase to give more confidence in stage two.”

The HS2 boss added that he expected to spend around 7-8 per cent of phase one’s £6.6bn civils budget by the third quarter of next year. 

Readers' comments (1)

  • maybe sitting down with the contractors to develop the budget might help! it makes you wonder who put it together in the first place, but here's a guess from me, it will be over budget and take longer than the programme,

    PM

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