HS2 project costs soar up to £66.6bn

An artist impression of HS2 (Photo: HS2)

During the committee meeting, Sir Jon Thompson, the executive chairman of HS2 Ltd, stated that the estimated cost for Phase 1 of the project ranges between £49 billion (US$62 billion) and £56.6 billion (US$72.1 billion) at 2019 prices. However, when accounting for current prices, the estimated cost range increases by approximately £8 to £10 billion (US$10 to 12 billion).

In 2013, the estimated cost of HS2 was £37.5 billion (US$47.8 billion) (in 2009 prices) for the entire planned network, including extensions from Birmingham to Manchester and Leeds that are now scrapped.

Sir Jon stated that the reasons for the cost increase included original budgets being too low as well as changes to scope, poor delivery and inflation.

He added, “This is a systemic problem. It’s not just about HS2, it’s about large projects that the Government funds.The budget needs to be set early on in order for an outline business case to be approved by the Government, sometimes by Parliament.

“At that point, people think OK the original estimate for Phase 1 was £30 billion-something.That is based on very, very immature data. You don’t have a design, you haven’t procured anything, and there is no detail on which you can cost anything.”