Is the HS2 rail project in trouble?

By Tom Espiner
Business reporter, BBC News

image source, PA
image captionSir Terry Morgan resigned from his positions at HS2 and Crossrail

All may not be rosy with the HS2 programme.

There have been ongoing questions raised about whether the project can be delivered on time and within budget.

And the recently-appointed HS2 chairman Sir Terry Morgan resigned from his post on Wednesday, after predicting that he would be asked to go by the Department for Transport.

Why is HS2 being built?

Thousands of rail commuters in the UK have to endure train services that are often subject to delays and cancellations.

As well as having to contend with strikes, in the early part of this summer timetabling chaos caused severe disruption.

Even Transport Secretary Chris Grayling has admitted that parts of the UK rail system are stretched to breaking point.

"The system is bursting at the seams… The reality is, the system is full," he told the BBC's Today programme, adding that on certain lines "if the slightest thing goes wrong, that can disrupt the network quite significantly".

That is why, he says, the UK needs high-speed rail links, such as the government's flagship HS2 programme, to take the pressure off commuter services and leave more room for freight.

Why did the HS2 chair quit?

Earlier this week, Sir Terry told BBC Radio 4's Today programme that he expected to be sacked due to delays and cost overruns on another major rail project he heads, Crossrail.

"My expectation is that I will be asked to resign [from both projects]," he presciently said.

But Sir Terry also hinted at HS2 problems.

"The challenge, of course, is the scope, the time, and the cost [of HS2] have already been set, and the engineers are now busy trying to assess just how they will build the work that's needed to construct it. There is a challenge inside the project," he said.

In a nutshell, HS2 has been set a budget of £55.7bn to deliver rail lines from London to Birmingham and on to Manchester and Leeds, with the first phase to open by December 2026.

Now engineers are trying to work out how they can do it.

How much trouble is the project in?

Some experts say there is absolutely no doubt that HS2 will cost substantially more than £55.7bn, including consultant Michael Byng, who wrote Network Rail's guidelines on how to estimate costs.

Mr Byng estimates that the cost for just the first phase of the project, from London to Birmingham, will be just under £56bn, and that the whole project could cost double that.

"It's very difficult to see how you maintain a positive, attractive cost-benefit analysis, prepared in 2015 before the project received royal assent, when the costs have probably doubled. That cost benefit-analysis will probably have disappeared," he told the Today programme.

In other words, if the cost doubles, will the project be worth it?

Rail expert and long-term HS2 critic Lord Berkeley also said HS2 will be substantially more costly.

"I think there is a lot of bad news to come from the [HS2] numbers. The work that we've done indicates that the cost will be about double," he told the Today programme.

"I think that's really serious. When you get into a figure that's probably £100bn for a high-speed line, that's an awful lot of money."

image source, Getty Images
image captionTransport Secretary Chris Grayling says contractors must stick to the budget.

What does the government say?

Chris Grayling, however, was adamant that the project would not cost more than £55.7bn.

"I'm very clear on HS2 - it's got a budget, it's got to live with that budget. The budget is [about] £55.5bn at 2014 prices, that's all there's going to be.

"The project has got to work within that. It's going through the early stages of getting its budget in shape at the moment, working with contractors to make sure it's got the right scope, the risk that's carried between the public sector and the contractors is balanced in an appropriate way, but there's a budget and it's got to stick to that."

Speaking on BBC Radio 4's Today programme, Mr Grayling also called into question Mr Byng's judgement.

"Michael Byng has been saying a lot of things. He's not somebody who is entirely well respected within his part of the industry, and I would question his judgement on this."

However, Lord Berkeley described Mr Byng as "one of the best and most respected cost-engineers in the country. I absolutely believe him."

Has work started on HS2?

Civil engineering work on HS2 has been pushed back to a June 2019 start date, a delay of seven months, according to reports.

However, Chris Grayling said some work had started.

"It's happening now. I've been to the start of works ceremony in Birmingham. The work is taking place in and around Euston, in and around Birmingham station at the HS2 station there. The work is happening, it currently employs 6,000 people."

A Department for Transport spokeswoman insisted that phase one of HS2 would be completed by December 2026.

The new chairman of HS2 is chartered engineer Allan Cook.

Will he be able to keep HS2 on time and on budget? Time will tell.

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