HS2 minister Andrew Stephenson has revealed delays in completing enabling works have led to “cost pressures” on the project
The latest report on HS2 to Parliament shows potential cost pressures of around £1.2bn over its target, revealing further costs could still emerge.
In phase one, the focus has primarily been on progressing the remaining enabling works and preparatory works, and the start of main works.
The overall budget for phase one, including Euston, is £44.6bn. This includes the cost of £40.3bn and an additional government-retained contingency of £4.3bn.
The target cost for phase one remains at £40.3bn. Around £11bn has been spent to date, including land and property provisions.
Approximately £12.6bn has additionally been contracted, with the remaining amount yet to be contracted.
To date, HS2 Ltd has drawn £400m of its £5.6bn delegated contingency to specific additional costs, which represents 4% of the overall contingency for phase one, and reflects an increase of £200m since the last report to Parliament.
Further cost pressures could still emerge
Andrew Stephenson, HS2 minister, in his report, said: “My last report to Parliament included £0.4bn from expected increases in the scope and duration of enabling works.
“These costs are now expected to be incurred and so are not shown as pressures but have instead been taken into the core cost estimate. They will be funded through surplus provision within HS2 Ltd’s core budget rather than from its delegated contingency.
“HS2 Ltd is currently re-planning its schedule for phase one in conjunction with its construction suppliers with a view to mitigating these delays.
“The schedule pressures reported will not impact the projected ‘delivery into service’ date range of 2029 to 2033 set last year, but further cost pressures could still emerge if mitigation activity is required.”
