‘We are a political project’: how HS2’s costs have spiralled out of control
Should the enormous engineering feat of HS2 become Rishi Sunak’s white elephant, these could be its expensive tusks.
At what was once a staging post but now looks like the end of the line, Old Oak Common, two brand new tunnel boring machines are to be buried underground, unused, ready for action – a mere £40m of kit that may never now drill the route’s last six miles east into central London.
As a percentage of HS2’s outlay, a sunk £40m barely scrapes into the decimal points. A high-speed rail network originally budgeted at £32.7bn to link London, Manchester and Leeds in 2012 was revised up to £55bn in 2015. It remains at the current £71bn only due to savage pruning and a wilful refusal to update the price over years of runaway inflation.
HS2’s precarious future was underlined when the prime minister again on Thursday repeatedly refused to answer questions about building north of Birmingham – and talked up the merits of the Old Oak Common development.
The future station there will knit together Elizabeth line and Great Western main line services with HS2 trains arriving underneath, in the yawning 850m-long box already largely excavated in west London.
But only six high-speed train platforms will be available – fewer than at Euston – severely limiting any possible services to Manchester, the connection regarded even by supporters as the bare minimum for HS2 to make economic sense.
Developers at Old Oak Common are clear: the job of HS2 Ltd, and the contractors they supervise, is to deliver according to the government’s mandate – no matter how much that might be delayed, rejigged, gold-plated or cast into uncertainty.
Others working on the line are less diplomatic and restrained. “We’re a political project first and a construction project second,” says one senior manager.
HS2 and its contractors have had to accept a pause in construction to central London, announced by the transport secretary, Mark Harper, in March – just two months after the chancellor, Jeremy Hunt, had committed to running the trains to Euston.
Under current plans, the two state-of-the-art tunnel boring machines under construction in Germany will be buried in an antechamber under Old Oak, to avoid jeopardising other crucial engineering work, while they await the go-ahead to Euston. It is not impossible to resume tunnelling under central London once trains or passengers start using the station – simply exponentially more difficult, disruptive and, again, expensive.
At Rickmansworth, Buckinghamshire, HS2’s biggest work site nestles just inside the M25, with purpose-built plants producing bespoke concrete segments for two of the most significant civil engineering works: the giant Colne Valley viaduct and the 13km tunnels through the Chilterns.
Acute inflation in construction – with labour scarce after Brexit and Covid and the cost of materials such as steel sent soaring by the war in Ukraine – left managers here with stark decisions. Buying a batch of steel reinforcements that had arrived in Liverpool at three times the normal price had to be set against the even greater cost of delaying tunnelling.
Both of these landmark projects also illustrate how other billions have clocked up. The tunnels, an early expensive concession to MPs in Conservative marginals, are extended with additional noise mitigation structures at the portal – a couple of hundred yards away from the constant roar of motorway traffic.
The tunnel ventilation shafts popping up at Chalfont Saint Peters and every few miles through the Chilterns will be artfully designed to look like barns and farmyards. A further redesign demanded by councils has come at another £3m cost, according to HS2.
The 3.4km length viaduct across the Colne Valley lakes – themselves partly human-made after quarrying and dredging – is built with special V-shaped concrete supports. It is designed to resemble a stone skimming across the surface of a lake – and make the construction palatable to the local authority, with a concrete finish that might not look out of place in a kitchen worktop.
There may well have been a cheaper way. But the environmental mitigations and cosmetic demands – largely from local Tory councils and politicians, ordering extravagant side dishes and then railing against the final bill – are, as one weary HS2 manager put it, simply the cost of building infrastructure in an island crammed with private property.
Prof Andrew McNaughton, who was technical director of HS2 from 2009 until 2017, concurs that costs have spun out of control, and the construction overdesigned – but believes a reset can put it back on track.
Two other factors, in his view, have piled on cost: the way contracts have been shaped and the excessive number of managers. Giving liability to the contractor has encouraged “designing for the worst possible case, deeper foundations, sinking more piles into the ground – these things add up”.
Meanwhile, McNaughton says, the project is being overseen by not just HS2 Ltd, but hundreds of Department for Transport employees and “development partners” from engineering consultancy firms: “You end up with this white-collar army out of proportion to what you see anywhere else in Europe.”
Although HS2 Ltd’s staffing and salaries appear excessive – with more than 40 employees earning more than £150,000 per annum and chief executives paid more than any other public official – McNaughton says that the bigger impact is the “creation of bureaucracy”: slowing down decisions and the signoff of designs, breeding uncertainty and piling on cost.
Nowhere has that been more evident than Euston station itself, where the estimated HS2 bill has ballooned to nearly £5bn, mired in indecision and uncertainty, according to the National Audit Office.
Meanwhile, arguments that were long deemed settled in parliament have been re-opened, with suspicious degrees of political expediency – from the review promised by Boris Johnson when vying for the party leadership in 2018, to the quiet axing of the Golborne Link through 1922 Committee chair Sir Graham Brady’s constituency last year, to Sunak’s pre-election jockeying now.
For Northern mayors, who united in saying this week that stopping HS2 at Birmingham would be “an international embarrassment and a national outrage”, the added danger is the threat to work on Northern Powerhouse Rail, which was to be built upon Phase 2. Potential offers to divert funds into conventional rail – with yet more redesign and delay costs – might prove equally contentious: the price tag for the TransPennine route upgrade is running three times over budget.
At the other end of the planned line, near Euston, where the majority of people displaced by HS2 once lived, is a mothballed construction site: a “scar on London”, according to Mark Reynolds, the infuriated chief executive of contractor Mace. While the prolonged indecision at the height of government continues, Camden has a “a hole in the ground which is splitting apart and blighting our communities”. As a local councillor, Danny Beales, put it: “All this pain, for no long-term gain, is not acceptable.”