Heidi Alexander, UK Transport Secretary, told the Parliament that the UK high-speed railway project HS2 would not reach its 2033 deadline or remain within budget. She cited systemic failures and mismanagement as well as rising costs.
This announcement is the latest blow to a problematic infrastructure project that was once touted as an ambitious transformational initiative for the transport system of the country.
Alexander told reporters that she received a “bleak assessment” from Mark Wild, the chief executive officer of HS2 Ltd. Wild warned the “unsustainable” trajectory in terms of costs, scope and time.
HS2 is under construction since over a decade, and its initial plans have already been significantly reduced.
Project costs will balloon; first trains won’t run until 2033
Alexander referred to Wild’s interim reports and said: “There is not a reasonable way of achieving the 2033 goal.”
It would be several months before a revised schedule and estimate of costs could be established.
She told the MPs that “I’m drawing a line on the sand” and “we are reseting how major infrastructure is delivered in this nation.”
Cost estimates for HS2 have risen dramatically since 2012, when the initial cost of PS33bn was set.
In 2013, this figure was PS50bn. Independent assessments predicted that the cost would reach PS106bn by 2020.
According to the latest estimates, remaining costs for this project will range between PS45bn (2019 prices) and PS57bn.
Wild warned in his letter that costs would continue to increase unless government contracts for major engineering projects were renegotiated and stricter controls implemented.
The main cause of delays is a flawed contracting model, rushed construction and the faulty contracting model.
Wild’s Report identified long-standing problems that plagued the Project since its conception.
HS2 Ltd has a number of problems, including launching the construction before finalising designs, a flawed model for contracting, and a workforce with major capabilities gaps.
He said that the testing alone could take up to three years, which is much longer than previously thought.
Wild blames the current “cost plus” contracts, which pay contractors regardless of cost overruns.
Analysts have concluded that HS2 Ltd.’s relationship with its contractors is unbalanced, and lacks proper accountability.
The Guardian financial editor Nils Pratley writes: “Works contracts were a major cause of the cost overruns. Both Stewart and Mark Wild, the former Crossrail CEO now charged with saving the mess, agree on this.”
The contracting model combined with the unrealistic targets turned contracts into “cost plus” agreements where contractors had no or little incentive to meet cost targets. “Companies ringed around the Department and its arms-length body, HS2 Ltd,” he said.
Wild also claimed that construction of HS2 had begun prematurely before the designs were finalised. This led to unrealistic budgets and schedules.
In his report, he also highlighted a lack of skill matching within HS2 Ltd. He described it as being “imbalanced”, with an excessive number of corporate functions but a critical shortage in technical and commercial expertise.
Wild noted that external shocks like the COVID-19 virus pandemic and Brexit as well as the conflict in Ukraine caused delays. However, they only compounded longstanding, deeper inefficiencies.
Construction firms have been criticised by the Institution of Civil Engineers for their “imbalance of powers” created in this project contracting model.
The shadow transport secretary admits that’mistakes have been made’
Gareth Bacon, shadow transport secretary, acknowledged that the turbulent history of this project was also acknowledged.
He said that “mistakes” were made when delivering HS2, and the Conservatives should be held responsible for the delays in the project.
He pointed to the decision in 2023 under then-prime minister Rishi Sunak to scrap the Birmingham-Manchester leg as an outcome of longstanding failures.
Heidi Alexander has confirmed that there are two studies underway in order to develop new protocols for infrastructure of large scale.
Wild is the leader of One. This program focuses on project management within an organization.
James Stewart’s second article examines delivery and governance models. The two papers are meant to help inform future UK megaprojects.
The ICD published this post: HS2 delays explained – Mismanagement, rising costs and project delay beyond 2033.
This site is for entertainment only. Click here to read more
