HS2 rail project could be further delayed as inflation pushes up costs

HS2 logo on a worker's jacket
A budget of £55.7 billion for the whole of HS2 was set in 2015. Credit: PA

The HS2 rail project could be delayed among a number of potential options being considered to curb rising costs.

The project's chief executive Mark Thurston said the impact of inflation on the project over the past year has been "significant", affecting timber, steel, concrete, labour costs and fuel.

Phase One of HS2 involves the railway being built between London and Birmingham, with the line extended from the West Midlands to Crewe in Phase 2a.

Phase 2b will connect Crewe to Manchester, and the West Midlands to the East Midlands.

The latest target cost of Phase One between London and Birmingham is £40.3 billion at 2019 prices. A budget of £55.7 billion for the whole of HS2 was set in 2015.

The report described the £2.6 billion budget set in April 2020 as “completely unrealistic” for what the DfT wanted to deliver.. Credit: Aaron Chown/PA

Mr Thurston told the BBC that HS2 was in discussion with suppliers and the Government on finding ways to minimise the soaring costs.

He said: “We’re looking at the timing of the project, the phasing of the project, we’re looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation.”

His comments come after rail minister Huw Merriman told MPs on Thursday the Government remained “absolutely committed” to the project.

HS2 chief executive Mark Thurston said the impact of inflation has been 'significant' Credit: Joe Giddens/PA

He told the House of Commons: “We are absolutely committed to delivering HS2 trains from London to Manchester and, of course, going over to the east as well.

“But of course we have to look at cost pressures, it’s absolutely right that HS2 focuses on costs, that should be expected of the Government and the taxpayer, we’ll continue to do so.

“But… I am absolutely committed, as is the Secretary of State (Mark Harper) and the entire department, to delivering HS2 and the benefits for this country.”

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