Despite the fact the HS2 project has not yet received Parliamentary approval, Chancellor George Osborne will today start bidding for £11.8bn worth of contracts at an event in China. The £11.8bn figure is almost £5bn more than the £7bn worth of contracts the Financial Times reported would go out to tender this month.
The Chancellor is also expected to announce that the government is currently organising an ‘HS2 partnering day’ to give Chinese companies an opportunity to meet UK firms and establish potential partnerships to join up on bids. By nominating UK companies as joint contractors in bids, Chinese firms would be able to get around EU rules on tender procurement.
Over the last decade, China has built thousands of miles of high speed railways across its vast interior, but the programme has been beset with safety problems, high-level corruption and financial problems due to the majority of the general public not being able to afford to use trains.
Within 40 days of the opening of the 350kph Wuhan-Guangzhou line in 2009, there had been five serious accidents and more safety concerns were raised in 2011 regarding the strength of concrete used in bridges and viaducts. In 2011 following a high speed rail crash in of Wenzhou which killed 40 people, Chinese authorities took part in a quite literal cover-up, burying the wreckage at the site. In July 2013, former minister of railways Liu Zhijun was sentenced to death (later suspended) for corruption after siphoning $2.8 billion (£1.7 billion) into an offshore bank account.
In this period, the Chinese have built a vast industry which has no other option but to tout for business internationally. Any Chinese involvement in building HS2 completely undermines the assurances being made by Government that HS2 construction and development would help jobs and growth in the UK.
High Speed Rail accounted for a quarter of Chinas entire economic stimulus package, the failed results of which are now coming home to roost.
Stop HS2 Campaign Manager Joe Rukin responded:
“The Chinese way of doing things certainly seems to be rubbing off on George Osborne, as he has decided to start a £12bn bidding process without any democratic mandate to do so, as Parliamentary approval of HS2 is still at least a year away. In the space of a month, what was expected to be £7bn worth of contracts is now £12bn, which demonstrates perfectly how out of control the costs of HS2 are, something again he could learn from the Chinese.”
“Everything about the Chinese experience with high speed rail; the high levels of debt due to cost over-runs, the fact it has failed to deliver sustainable growth, the poor safety, corruption and fact the forecasted passengers never materialised because they cannot accord the fares, should ring very loud alarm bells which would stop anyone with an ounce of common sense from going anywhere near it. Sadly our Chancellor wants to jump into bed with the Chinese on this highly suspect project. Any Chinese involvement in HS2 surely destroys any concept that the construction of HS2 will provide UK workers with the jobs currently being claimed.”
Penny Gaines, chair of Stop HS2 added:
“There are very real concerns over these plans to encourage Chinese firms to bid for such large HS2 construction contracts. What is really key is that HS2 does not have the go ahead now for construction and HS2 will never have the go ahead unless the HS2 Hybrid Bill, currently being scrutinised by Members of Parliament, passes the third reading and gets Royal Assent. Even the supporters of HS2 say they do not expect that until the end of 2016 and it may be a lot later. There are huge concerns about setting up such large contracts with foreign firms when the start date is as uncertain as it is at the moment.”
“We’ve seen what has happened where rail electrification has been put on hold in the North to focus on projects in the south, because of badly written contracts for GWR which didn’t allow for delays. Far from HS2 being good for British business, it looks like the Chancellor is turning it into a way of diverting British taxpayers’ money to the coffers of Chinese construction firms.”