HS2 procurement must be robust, says chairman

4 September 2019

HS2 must learn from its past experience and from significant infrastructure projects such as Crossrail to increase “flexibility and creativity” in future contracting arrangements. 

Allan Cook, chairman of HS2, said increased contracting flexibility would allow for an “appropriate distribution of risk for the different types of work within the programme”. 

In a report into the project, Cook said increased flexibility would require improved use of existing government frameworks to help the project get to market more quickly and reduce the associated costs of going to market for both HS2 and the supply chain.

“In addition, the procurement processes need to be robust enough to ensure HS2 is future-proofed against any potential litigation and challenge,” he said. 

“The scale of HS2 presents an opportunity to make a significant contribution to enhancing collaboration and contracting arrangements with businesses within the UK. The relationship and collaboration between the UK supply chain and HS2 is already strong and provides a solid platform for further thinking in this area.” 

Cook added the budget and target schedule for the project had proved “unrealistic”. Initial services on the first phase of the project between London and Birmingham were expected to commence in 2026 but could be delayed until 2031. 

The second phase, including services to Manchester and Leeds, could also be delayed until 2040. 

“The scale and the complexity of the task, as well as the transformational benefits it will deliver for the country and its regions were under-estimated in the original business case,” he said. 

“The cost/benefit model used on HS2, which was designed for smaller scale schemes, has proved inadequate in capturing the full transformational effect of HS2, particularly on changing land values.”

Cook added that benchmarking needs to be deployed more uniformly to help keep pressure on costs through the programme’s lifecycle. 

Cook insisted the project remains “the right strategic answer” to meet Britain’s transport needs.

Meanwhile, transport secretary Grant Shapps told MPs construction of the HS2 high speed rail project could reach £88bn.

While the project was expected to cost £55bn, the new cost of £88bn was based on 2019 prices and to account for construction cost inflation, Shapps said. 

Last month, the government announced an independent review into the future of the project.

In his Spending Round chancellor Sajid Javid announced an infrastructure strategy would be unveiled in the autumn, and he spoke of an “infrastructure revolution”. 

“We will use the government's resources to kick-start the infrastructure revolution,” he said.

Javid also said no government department would face a budget cut next year. “Every single government department has had its budget for day-to-day spending increased at least in line with inflation,” he said.

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