The chief executive of HS2 has acknowledged that it is 'terrible' that the budget for the severely delayed high-speed rail project is expected to surge to £100 billion. Mark Wild, who was brought in to salvage the struggling project after previously rescuing the troubled Crossrail initiative, informed MPs on Tuesday that he is confident there will be no additional delays following years of setbacks.
On Monday, Transport Secretary Heidi Alexander revealed that costs are projected to fall between £87.7 billion and £102.7 billion in 2025 prices, with services likely to commence between May 2036 and October 2039. When first announced, the project was estimated to cost £32.7 billion for the London-to-Birmingham leg, with services originally scheduled to begin this year.
However, the project is now significantly delayed and over budget, and trains will operate at a maximum speed of 199 mph instead of the planned 224 mph, despite the tracks being built to accommodate higher speeds. Speaking to the Transport Select Committee, Mr Wild, a former London Underground boss, stated: 'Let's just acknowledge what bad news this is: from the budget set in April 2020 that was £42-43bn, that number has doubled. This is terrible news and we have to think about the reasons for that.'
The HS2 chief attributed the escalating costs partly to inflation spikes, particularly those triggered by the war in Ukraine, as well as the fact that construction began in 2017 before the design was fully completed. He admitted that the design is still only '80 to 90 per cent complete,' contrasting this with high-speed projects in Europe, which are built 'in faster time.' For instance, France recently approved plans to construct 222 km of high-speed railway between Toulouse and Bordeaux for €8.5 billion (£7.3 billion), roughly the same distance as the HS2 London-to-Birmingham line.
When asked if he could complete HS2 within the original budget of £45 billion and a 10-year timeframe, Mr Wild replied: 'I don't know.' He conceded that those in charge had 'lost control' of the project before his appointment, noting that HS2 executives met with ministers only four times in the three years preceding the General Election.
Nevertheless, he pledged that within a year, the project will have a 'high-fidelity' schedule to bring it back on track. 'When I arrived in this job, the project had become completely uncoordinated. We will get into a position of April 2027 where matters of reserve and contingency come under normal controls. I know I'm promising jam tomorrow, but I'm convinced the bookends of time are robust and the baseline will fit within it. We will manage this project in an orderly and transparent way,' he added.
Rail minister Lord Hendy remarked that anyone observing the proceedings would be 'rightly horrified' by the project's management. 'This is a disastrous place to be for a project at this stage,' he said. Addressing committee chair Ruth Cadbury, he added: 'We're confident with this process, but you would have liked this process to start quite a long time ago, wouldn't you?'
Transport Secretary Ms Alexander blamed the rising costs on 'past misunderstanding of the work required, underestimation and inefficiency, issues within the control of HS2 Ltd, some of its suppliers, and previous governments.' She noted that efforts to remove 'gold plating' from the project would include reducing the emphasis on 'highest possible speeds.'
