Mandarins at HS2 Ltd have estimated the actual final cost of HS2 will be £200 billion, it has been claimed. The official cost of the project, which started at £30bn in 2010 almost doubled to £56bn when it was last revised in 2015, though this figure does not include certain items such as the cost of the proposed new station near Crewe, and has not changed since the proposed route changes on Phase 2b were announced in 2016. In 2013, Treasury insiders put the overall cost at £73bn.
Last year, rail consultant Michael Byng, who produced new methods of estimating costs for Network Rail, applied those methodologies to the HS2 project and came up with an estimate just to build Phase 1 of HS2 of £53.6bn, almost as much as the Government estimate building the entire scheme and purchasing rolling stock will cost. This was dismissed by Government who claimed the official cost estimates had been ‘independently verified’, however it transpired this was done inside the DfT using the old discredited methodology.
“Leaks from inside the HS2 bureaucracy suggests the total cost of HS2 will be over £200 billion.”
It is absolutely clear that HS2 Ltd and the Government have not been truthful in the past about the costs of the project. In 2015, when costs were increased from £50.1bn to £55.6bn during the Autumn Statement, it was claimed that the costs had simply been risen to account for inflation, but an FOI request showed this not to be true as the cost of Phase 2 had actually gone up by 39.2%, with the overall costs kept down by reducing the estimate for rolling stock.
It is also the case that HS2 Ltd have regularly paid contractors significantly more than the value of their tenders. In 2014 it was revealed that a set of professional services contracts valued at £101m had come in 86% over-budget at £188m. The latest example of lack of budgetary control is the revelation that CH2M Hill, the firm current HS2 Ltd boss Roy Hill is on secondment from and his replacement Mark Thurrock is employed by, were paid £34m more than the value of their contract as Phase 1 development partner. When that contract was awarded in 2012, it was valued at £70m, but a written answer revealed the company has been paid £104, a 49% over-run on budget.
Joe Rukin, Stop HS2 Campaign Manager responded:
“Over the years, we have seen the costs of HS2 spiral as they constantly make amendments to correct previous mistakes, and they exercise no budgetary control over contractors who seem to have been left to run their own kleptocracy. So to hear they are actually working to an estimate of £200bn seems about right, and is maybe the first truthful thing to ever come out of HS2 Ltd.”
“It has been clear since the outset that HS2 has got this far because the contractors who want to build it have lobbied hard for it, creating an illusionary imperative which has suckered politicians who are too lazy to do their own research and understand the case for this project is completely fictitious. Sadly it seems the only thing we can do now is watch the costs go up as the contractors build their gravy train, and we can look forward to saying ‘We told you so’ in twenty years when all those responsible for approving this disastrous white elephant are long gone.”