HS2 boss admits cost of London-Birmingham line could hit nearly £67bn

The cost of building HS2 between London and Birmingham could reach nearly £67bn – almost double an early projection for the entire project to the north.

HS2 Ltd executive chairman Sir Jon Thompson told MPs the estimated cost for phase one stood between £49bn and £56.6bn based on 2019 prices – but that adjusting the range for current prices would mean “adding somewhere between eight and 10 billion pounds”.

The new estimate is nearly double what the high-speed network was expected to cost in 2013, when it had a price tag of £37.5bn.

That figure was based on 2009 prices for the entire planned network, including the routes to Birmingham to Manchester and Leeds which have now been scrapped.

Giving evidence to parliament’s Transport Select Committee, Sir Jon said the costs for phase one had jumped due to original budgets being too low, poor delivery and inflation.

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He said there was a “systemic problem” where budgets are set out early “based on very, very immature data”.

“You don’t have a design, you haven’t procured anything, there is no detail on which you can cost anything,” he explained.

“If you say to a builder, can you give me a quote for an extension, they walk around and say ‘it’s £50,000-something’.

“But then you get into the detailed design, you know exactly how big it is, what surfaces you want, how much concrete needs to be poured. Unsurprisingly you get a better number.

“That’s the situation here. The situation with HS2 in my opinion is the estimate was poor, the budget was set too early, and then when you get further into it, you get much better information.

“Then on that basis, you can cost it out with more accuracy and then you discover it’s higher.”

Rishi Sunak took the controversial decision to scrap the northern leg of HS2 to Manchester at the Conservative Party conference in October – a move that attracted criticism from regional leaders who branded it a “betrayal” of northern voters.

The prime minister promised to spend the billions of cash savings on hundreds of other transport schemes across the country instead, including a new “Network North” project to join up northern cities by rail.

However, the government was recently mocked after it emerged roads in London will be revamped as part of the Network North project.

A recent document published by the Department for Transport (DfT) which outlined plans for Network North stated the government believed phase one of HS2 should cost between £45bn and £54bn and that HS2 Ltd “should deliver at the lower end of this range”.

But Sir Jon told the committee: “It’s for the department and the government to decide what it wants to use that data for, but I do not believe that phase one could be delivered for £45bn.”

He also told the committee the decision to scrap HS2 north of Birmingham could lead to a reduction in seat capacity for train services between London and Manchester compared with today.

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