United Kingdom

Scrapping HS2 will cost £12 BILLION

Scrapping the HS2 would cost £12billion as the Government-owned firm behind the rail project is accused of trying to 'con' Boris Johnson into giving it the green light.

Ministers have warned that abandoning the high-speed rail proposals would cost billions in compensations as well as leaving some of the UK's major construction companies on the brink of financial uncertainty.

And now allegations made by former staff members at the HS2 firm, which is owned by the Department for Transport, claim that additional costs are being covered up. 

Scrapping the HS2 would cost £12billion as the Government-owned firm behind the rail project is accused of trying to 'con' Boris Johnson into giving it the green light. Pictured: Artist's impression of an HS2 train on the Birmingham and Fazeley viaduct

An estimated £9billion has already been spent on the scheme and sources close to the project have said that £3billion in extra costs would be incurred even if it was scrapped immediately, according to the Observer. 

HS2 Ltd has been accused of revising agreements with its main contractors to ensure that future increases in cost will be handed directly to the firm.

This would mean that they would be funded by taxpayers rather than private companies, according to The Sunday Telegraph. 

Colin Morris, HS2's former director of strategy, said that the company appeared to be 'artificially' lowering the costs of the scheme. 

The witness statements of the former senior members of staff were recently handed to the Prime Minister's advisers.  

Former Cabinet Minister Dame Cheryl Gillan said in response: 'We need to make sure the Government is not being conned once again by people with vested interests.'

It is thought that Boris Johnson's decision on whether to scrap the project is imminent as the issue of spiralling costs continues to cause tensions inside the Conservative party.

Transport Secretary Grant Shapps has said the decision would be made in 'weeks rather than months'.

It is thought that Boris Johnson's decision on whether to scrap the project is imminent as the issue of spiralling costs continues to cause tensions inside the Conservative party. PICTURED: UK Prime Minister outside Downing Street for Chinese New Year celebrations

A Whitehall spending watchdog said that HS2 is over budget and behind schedule because its complexity and risks were under-estimated.

The National Audit Office (NAO) warned that it is impossible to 'estimate with certainty what the final cost could be'.

It published a report urging the Government and HS2 Ltd to be 'transparent and provide realistic assessments' in relation to the high-speed railway.

A Government-commissioned review led by former HS2 Ltd chairman Doug Oakervee leaked earlier this week stated that the project's bill could reach £106billion.

But HS2 was only allocated £56billion in 2015.

Phase One between London and Birmingham was due to open in 2026 but full services are now forecast to start between 2031 and 2036.

The NAO noted that the Department for Transport set the available funding for the first phase in 2013 when there was only a 'basic' design for the project.

It also found that HS2 Ltd failed to add enough contingency to its cost estimates after using a calculation method that was inappropriate for the early stage of the programme.

The amount of contingency was not enough to cover 'significant increases in cost' which emerged as the design became more detailed and issues such as poor ground conditions came to light, the report stated.

A Government-commissioned review led by former HS2 Ltd chairman Doug Oakervee leaked earlier this week stated that the project's bill could reach £106billion 

Head of the NAO Gareth Davies said: 'There are important lessons to be learned from HS2, not only for the Department for Transport and HS2 Ltd, but for other major infrastructure programmes.

'To ensure public trust, the Department and HS2 Ltd must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway that remain.'

A spokeswoman for the Department for Transport said it 'supported this review and is already acting on many of its recommendations'.

She added: 'To ensure transparency around the project, we have worked closely with the NAO to provide information on the latest cost and schedule estimates for HS2.

'We recognise that there have been significant underestimations of both the cost and schedule of HS2 in the past which is why we commissioned the Oakervee review to provide advice on whether and how to proceed with HS2.'

An spokesman for HS2 Ltd said: 'After being appointed HS2 Ltd CEO in 2017, Mark Thurston identified the serious challenges of complexity and risk in the project, and he made several significant changes and improvements to the organisation, its governance and processes.

'As the NAO recognises, this work - along with a greater understanding of the ground conditions and build requirements - means ministers have robust cost estimates for Phase One of the HS2 project.'

He added that HS2 has a 'highly-skilled team in place ready to build Britain's new state-of-the-art, low-carbon railway'.

Political leaders in northern England and business groups claim HS2 is vital to boosting transport links across the region and providing increased capacity on the overcrowded rail network.

Construction firms warn that scrapping it would cause major damage to the industry.

But opponents claim HS2 is too expensive and the money would be better spent elsewhere, while several environmental groups say it would cause huge damage to natural habitats and ancient woodland.