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28 June 2013 | Adam Leach
The Department for Transport has increased the budget for its flagship infrastructure project ‘HS2’ by £10 billion, bringing the total potential spend to more than £40 billion.
The high-speed rail network, known as HS2, is planned to link London to Birmingham by 2026 and extend connections to Manchester and Sheffield by 2032. Revised figures put the cost for phase one at £21.4 billion and phase two at £21.2 billion. The new total of £41.6 billion, an increase of around £10 billion, is a result of route changes and an increase in the contingency fund to £12.7 billion.
Transport secretary Patrick McLoughlin, stressed that the revised budget represents the maximum amount rather than the intended amount to be spent. “While I expect the final costs to be lower than those I have outlined, this is the right way to plan the project,” he said.
In a further development, former chief executive of the London Organising Committee of the Olympic Games, Paul Deighton has been charged with maximising the economic benefits the rail link creates. The former Goldman Sachs banker, who was appointed to the House of Lords in January, will lead a taskforce that will focus on delivering supply chain benefits through the project.
Deighton said: “I know from experience that big projects can bring big rewards, boosting business, inspiring innovation and creating jobs. HS2 is of vital importance to this country’s growth and will help us compete in the global race.”
The announcements came as the government guaranteed that at least £300 billion will be spent on infrastructure between 2015 and 2025. Specific funding pledges included £28 billion for road improvements, £10 billion on schools and £370 million on flood defences.
Responding to the plans, chief policy director at the CBI Katja Hall,expressed support for the investment but said it was time for work to begin on these projects instead of just being discussed.“This is the kind of bold, ambitious package that businesses have wanted for years - but the time for grand announcements is over. Ministers now need to follow through urgently on their promises or they risk the private sector growing even more frustrated.”