HS2 boss Sir Jon Thompson’s new estimate is almost double what the entire project was expected to cost in 2013. So the entire project, including the planned phase two routes to Manchester and Leeds, originally had a price tag of £37.5 billion.
Giving evidence to the Transport Select Committee, Sir Jon confirmed that HS2 Ltd’s latest estimate for the London to Birmingham section was between £49 billion and £56.6 billion in 2019 prices. This is contrary to the government’s current expectations in its recent Network North plan, which said the cut project would be delivered for £45 billion.
estimates suggest that after three years of rapid steel and concrete cost inflation across the industry, particularly around £8 billion to £10 billion, the estimate would need to be added to the estimate to give an indication of actual costs at current prices. Sir Jon also told the committee that he could not guarantee that costs would not continue to rise while contractors had an incentive to spend money through cost-plus contracts. He said HS2 had sought to renegotiate terms with contractors and had, for the first time, put in place appropriate management control systems to monitor individual contracts.