HS2 could cost up to £66bn, according to management estimates

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The cost of building Britain’s high-speed Rail 2 was estimated at up to £66 billion, representing a £9 billion increase on the previous calculation, in a research paper released this year by the management of the troubled project.

The Department for Transport’s report on Tuesday will cite an HS2 board paper from June which put the cost of the project at between £54bn and £66bn at 2019 prices, according to people familiar with the document.

This represents a significant increase on November last year, when the government revealed HS2’s official estimate for the cost of the London-Birmingham rail link had risen to Between £49 billion and £57 billion In 2019 prices.

If inflation is taken into account, the latest estimate of £66 billion would be close to £80 billion at today’s prices.

Last year’s official estimates of between £49bn and £57bn came despite the then Conservative government halving the scheme by scrapping the northern leg of HS2 from Birmingham to Manchester, in a desperate attempt to save money.

The government will object to the £66 billion estimate, saying it has not been approved by the Department for Transport, according to officials.

One official said the figure was not an official HS2 calculation but an unofficial estimate based on preliminary data. But the latest estimate highlights how out of control the cost of Britain’s major transport project appears to be.

Mark Wild, HS2’s new chief executive, is implementing an operation review From the chart price.

It is expected to take at least four or five months to complete the work. One industry figure said: “I wouldn’t be surprised if Mark comes up with a figure of £80bn once he can deal with rising costs, inflation and all the rest.”

Last October, Transport Secretary Louise Hay announced that Wild would “assess the current situation in relation to cost, schedule and culture, and present an action plan to deliver the remaining work as cost-effectively as possible, including to a realistic budget and timetable.” “.

Wild will also seek to renegotiate some contracts which officials noted had left HS2 “above the barrel”.

Its review is likely to coincide with the publication of the Treasury’s three-year spending review in June, at which point the cost of HS2 is likely to be re-estimated to take account of inflation.

The HS2 project has been plagued by delays and cost overruns since it was given the green light by ministers more than a decade ago, with management blaming issues including cost-plus contracts, an increase in tunneling and complications related to ground conditions.

The cost of the line between London and northern England was set at £33 billion when it was approved in 2012.

DFT and HS2 have been contacted for comment.