Mark Wild, chief executive of HS2 Ltd, has told MPs that the high-speed rail project is already billions over budget, with construction contracts originally priced at £19.5bn now costing £26bn despite being 'just over halfway done'. Speaking to the transport select committee, Wild warned that the total overspend could reach between 50% and 100% of the original estimate.
Wild attributed the spiralling costs to a loss of control over the programme, exacerbated by what he called 'optimism bias' and the rush to begin work in 2020 without finalising designs or securing local planning consents. He said contractors could not price the risk, leading to the crystallisation of risk as costs mounted.
The project, now reduced to the London-Birmingham line, was originally scheduled to open in 2026. However, Wild advised the transport secretary last month that full services could not begin until after 2033. He said Covid and inflation from Russia's invasion of Ukraine had also contributed to delays and cost increases.
During the hearing, rail minister Lord Hendy questioned the political decision to build an 'exceptionally fast railway', noting that HS2 trains would have a maximum speed of 225mph. He said it was unclear why there was 'such zealotry about the highest-speed railway in a relatively small country'.
Wild said the company was 'unbalanced', with too many long-serving consultants and not enough frontline staff managing contractors. He announced a 'reset' of construction, including renegotiating contracts and removing 'gold plating' such as air-conditioned platforms at Euston, which Lord Hendy noted even Saudi Arabia did not have.
