Construction on high-speed rail scheme started too early, new chief tells MPs
HS2 has begun a full programme reset which may not be complete for more than a year, MPs were told this week.
Senior leaders on the project from the Department for Transport (DfT) and the delivery body itself were subjected to a grilling by the public accounts committee yesterday over the scheme’s rising costs.
Bernadette Kelly, permanent secretary at the DfT, said the department had been working on an “accurate and robust cost range” for the scheme since last October, when the previous prime minister made swingeing cuts to the project.
She told MPs that the DfT still did not have such an estimate.
HS2 Ltd, the delivery body responsible for the high-speed scheme, has provided its own upwardly revised estimate of £54bn to £66bn, which was published in a statement to parliament earlier this week.
But Kelly said this was an “unassured figure” and that the department does note regard it as “a reliable and agreed cost estimate”.
She added: “We have to break this cycle of cost escalation on this programme, once and for all” and made it clear that the scheme was engaged in a “whole programme reset” which would run “well into 2025” and would not be completed in time for the spending review.
HS2 Ltd has recently undergone a change of leadership, with former Crossrail chief Mark Wild taking over as chief executive at the start of the month.
In his first appearance in front of the committee in his new role, Wild acknowledged that HS2 in its “core mission to control costs [and] deliver this for the lowest feasible costs has failed”.
He also set out his views on how the project had ended up experiencing such severe cost overruns, explaining that “construction started way too early on this project”.
He continued: “The rush to start before mature design consents was really, in retrospect, a mistake.
“Secondly, the contract intrinsically moved the risk to HS2 Ltd to manage. It was a conscious and intrinsic decision reviewed quite expertly by the NAO at the time, and the NAO at the time commented that HS2 Ltd must be prepared to manage this change of risk profile. I believe HS2 Ltd has not managed the risk profile in an optimal way.”
Wild indicated that the reassessment of the project might take even longer than Kelly had suggested, saying that the “reality is it won’t be until mid-2026 that we will be sitting here with an assured baseline that could be properly measured against”.
He added: “That may seem an extraordinary amount of time, but as the [committee] chair will remember in Crossrail, I actually got this wrong at the beginning of Crossrail.
“We tried to set the baseline within six months and it was proven to be too optimistic.”
Asked whether HS2 Ltd would apologise for the £100m bat protection structure at Sheephouse Wood, which has been a major source of controversy, Wild said he was unable to do so.
He said that, while he could “understand why [it] would raise public concern”, he could not apologise for complying with the law and said the structure remained the most appropriate one with which to do so.
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