HS2 Reset: Evidence to Transport Committee - 9 July 2025 "Total overspend on high-speed rail could be as much as 100%"

[Nottingham59]

I see that Mark Wild (CEO of HS2 Ltd) is now saying that the overspend on HS2 phase 1 is likely to be 50% to 100%.

HS2 already billions over budget with work ‘just over halfway done’, says rail boss

Total overspend on high-speed rail could be as high as 100%, Mark Wild, who runs the project, told MPs

www.theguardian.com

HS2 construction contracts priced at £19.5bn have already cost £26bn despite being “just over halfway done”, the boss of the high-speed rail project has told MPs.

Civil engineering to build tunnels and cuttings for the 100-mile line should be almost finished but is closer to 60% complete, while only a third of the wider project – including laying tracks and wiring – is done, the transport select committee heard on Wednesday.

EDIT: The official video of the Transport Committe session is available here:

https://committees.parliament.uk/event/22784/formal-meeting-oral-evidence-session/

 

[GRALISTAIR]

Eye watering. Just eye watering. Also embarrassing.

 

[Tezza1978]

Nothing much new in Wild's statement to the committee. He's got a tough job to turn the supertanker around but given the success he had getting Crossrail back on track I think he will do a good job.

The media jump on every story about HS2 as if its an exclusive shock horror revelation. Yes huge cock ups have been made in all sorts of areas of project planning and finance and contracts - and its essential huge lessons are learned and any corruption/dodginess pursued in court....but "we are where we are"....

 

[LNW-GW Joint]

A good team job defending HS2 generally by Wild/Hendy/Over (DfT).
Questioning a bit vague, and rather hijacked by the public accounts committee guest.
Wild, while being open about past problems, didn't really expand on problem areas except to say civils were 60% complete, where on the original timescale they should have finished.
Essentially they expect to run the project to a new baseline from next April.

Hendy did outline thinking about Euston and what might be possible about the WCML north of Handsacre.
I think he was rolling the pitch for some short by-passes rather than restoring Phase 2a and the route to Manchester.
Nobody asked any questions about the railway systems contracts just awarded, except that a "cost per km" was well understood, unlike civils.
They haven't decided how to test the new line when it is finished, not having a 400km/h test track.
No discussion about rolling stock either, except the admission that 400m sets won't fit at Manchester Piccadilly.

 

[E27007]

Years behind schedule , costs continue to balloon, a line from Birmingham to nowhere, poor value for money, have we arrived at the point when HS2 Ltd should file for administration?

 

[growse]

Years behind schedule , costs continue to balloon, a line from Birmingham to nowhere, poor value for money, have we arrived at the point when HS2 Ltd should file for administration?

To serve what purpose?

 

[FMerrymon]

Years behind schedule , costs continue to balloon, a line from Birmingham to nowhere, poor value for money, have we arrived at the point when HS2 Ltd should file for administration?

They addressed the value for money - rather well I thought. The point is that bcr is only really used to calculate transport benefits to compare different ways of solving a specific issue. They don't take into account jobs and housing, nor in the counterfactual of restrictions of growth due to low capacity.

Ruth Cadbury urged them to build a new line north of handsacre at the end as the motorways and rail lines become saturated connecting to the north.

== Doublepost prevention - post automatically merged: 9 Jul 2025 ==

A good team job defending HS2 generally by Wild/Hendy/Over (DfT).
Questioning a bit vague, and rather hijacked by the public accounts committee guest.
Wild, while being open about past problems, didn't really expand on problem areas except to say civils were 60% complete, where on the original timescale they should have finished.
Essentially they expect to run the project to a new baseline from next April.

Hendy did outline thinking about Euston and what might be possible about the WCML north of Handsacre.
I think he was rolling the pitch for some short by-passes rather than restoring Phase 2a and the route to Manchester.
Nobody asked any questions about the railway systems contracts just awarded, except that a "cost per km" was well understood, unlike civils.
They haven't decided how to test the new line when it is finished, not having a 400km/h test track.
No discussion about rolling stock either, except the admission that 400m sets won't fit at Manchester Piccadilly.

A few errors from the panel. Complete nonsense spoken about the bat tunnel, which surprised me. They didn't talk about how Euston had scope added to it like oversite development which was a large part of cost increases and that it wasn't hs2 that pushed for Euston redesign in one phase, but was govt on advice from Oakervee.

 

[E27007]

To serve what purpose?

So the administrators may kindly euthanaise a terminally ill patient

== Doublepost prevention - post automatically merged: 9 Jul 2025 ==

The recently releaed Steer Report on HS1,commissioned for the Govt, concludes HS1 as "poor value for money" the report concludes the economic growth and regeneration of communities served by HS1 to be very modest and below predictions, passenger numbers too are far below the predictions, the hypothesis of high-speed travel as a catalyst for prosperity is unsound.
The Steers Report was finalised over two years ago, yet not published until recently,some have made unkind remarks as to reasons for the late release.
Unkind remarks centred upon the sensitivity of HS2 to scrutiny of the hypothesis of its benefits

 

[chris2]

I see that Mark Wild (CEO of HS2 Ltd) is now saying that the overspend on HS2 phase 1 is likely to be 50% to 100%.

He was talking about the civils contracts specifically.

Original budget 19.5b for civils, total spend 26b to complete 60%.

If 50-100% more expensive that gives a range of 29.25-39b.

 

[growse]

So the administrators may kindly euthanaise a terminally ill patient

.... And then what? Send everybody home?

the hypothesis of high-speed travel as a catalyst for prosperity is unsound.

HS1 and HS2 are being built for completely different reasons.

He's got a tough job to turn the supertanker around but given the success he had getting Crossrail back on track I think he will do a good job

I really hope so. The parallels between HS2 and crossrail are evident (both poorly managed, late, expensive, capacity infrastructure projects) and people doubted CR could be rescued. Now it's a resounding success.

 

[Xavi]

Wild set the bar low at Crossrail when he arrived and is doing the same again at HS2 in terms of time and cost. Makes it easy to attribute all the problems to the past and take the glory for turning the project around.

Also, the major civil works contractors did not price the budgets. Treasury refused to sign off the tendered target cost prices and, with the blessing of DfT and Cabinet Office, agreed to go ahead with cost plus contracts keeping the real forecasts (tendered prices) out of Treasury spending forecasts while it suited the government of the time. The alternative was cancellation which didn’t fit with the levelling-up narrative. Then Rishi had his hotel moment, revealed the true costs, cancelled phase 2ab and postponed Euston in a desperate attempt to win some votes back.

 

[Sonik]

Treasury refused to sign off the tendered target cost prices and, with the blessing of DfT and Cabinet Office, agreed to go ahead with cost plus contracts keeping the real forecasts (tendered prices) out of Treasury spending forecasts while it suited the government of the time.

Likely that this has been responsible for much cost growth (besides the obvious politically driven scope creep)

Firstly because the original estimates were unrealistic
Secondly because contractors are rewarded for growing scope (note here the often seemingly excessive level of temporary works)

I think this is what Wild means when he talks about 'lack of alignment of incentives'

 

[Tezza1978]

Then Rishi had his hotel moment, revealed the true costs, cancelled phase 2ab and postponed Euston in a desperate attempt to win some votes back.

A crazy act of vandalism by a total idiot who hates trains and didn't for one second consider the consequences for the rest of the project. Hendy was pretty scathing about this aspect - been watching this meeting. Sunak seemed to think there was a huge number of votes in castrating HS2 because of that ridiculously narrow by election win in Uxbridge - and he was seriously wrong.

Some of the problems were clearly ignored by Boris the buffoon (having to have the fastest HS line in Europe whereas it could have been HS1 spec speed) but as much as I despise him for many other reasons..... at least he was behind the project, saw the huge benefits for economic growth and low carbon transport, supporting net zero. Whereas others including Farage would seemingly be happy to pay up the enormous bill to cancel the contracts and leave the part completed line to rot just to try and prove their point, "win" over a few NIMBYs and make us the laughing stock of the world, while not solving any of the capacity problems for N-S connectivity, with a full M6 and a full WCML.....

 

[FMerrymon]

Some of the problems were clearly ignored by Boris the buffoon (having to have the fastest HS line in Europe whereas it could have been HS1 spec speed) but as much as I despise him for many other reasons.....

Nothing to do with Boris, that was a decision made in 2009 by the then Labour government. I remain unconvinced the speed is the issue and the examples Hendy and Wild gave at the TSC were false - such as that bat tunnel was required because the line had to be straight and therefore couldnt avoid the woods. Nonsense.

 

[Xavi]

Likely that this has been responsible for much cost growth (besides the obvious politically driven scope creep)

Firstly because the original estimates were unrealistic
Secondly because contractors are rewarded for growing scope (note here the often seemingly excessive level of temporary works)

I think this is what Wild means when he talks about 'lack of alignment of incentives'

The tendered contractor target costs would not have included any growth of scope, that would have come later through variations.

A major mistake was selecting Design & Build rather than traditional design where professional designers / engineers are responsible for all design (and liability) and ensuring the contractor builds accordingly. Design would also have been 90%+ completed before any construction commenced. Professional engineers would have willingly designed to a budget and declared that many stakeholder aspirations were unaffordable before construction commenced.

D&B is at the heart of the problems in UK construction since, as you say, contractors are rewarded for spending more. D&B in the UK is a Thatcher legacy we have all paid the price for, she hated the idea that a professional engineer could be highly regarded and appropriately compensated, much better to let market forces increase shareholder returns and taxpayer bills.

Contractors Mace Dragados spearheading (!) Euston is a perfect example, they earned greater profits the more they spent on subcontracted designers (contractor’s fee being paid on top of the designer costs), and had no incentive to instruct their chosen subcontracted designers to design to budget. The more the project would cost, the more cash / fee / profit they would earn. This is the ‘lack of alignment’ Wild refers to, he needs to step up and call for D&B to play a much lesser role in UK construction.

 

[Sonik]

they earned greater profits the more they spent on subcontracted designers (contractor’s fee being paid on top of the designer costs), and had no incentive to instruct their chosen subcontracted designers to design to budget. The more the project would cost, the more cash / fee / profit they would earn. This is the ‘lack of alignment’ Wild refers to, he needs to step up and call for D&B to play a much lesser role in UK construction.

Yep percentage professional fees are a farce. The other problem (which TBF Wild has already highlighted) is lack of in-house technical skills, to oversee contractors.

It does seem that the reset is making some of the right noises, but it remains to be seen what it delivers.

 

[slowroad]

A crazy act of vandalism by a total idiot who hates trains and didn't for one second consider the consequences for the rest of the project. Hendy was pretty scathing about this aspect - been watching this meeting. Sunak seemed to think there was a huge number of votes in castrating HS2 because of that ridiculously narrow by election win in Uxbridge - and he was seriously wrong.

Some of the problems were clearly ignored by Boris the buffoon (having to have the fastest HS line in Europe whereas it could have been HS1 spec speed) but as much as I despise him for many other reasons..... at least he was behind the project, saw the huge benefits for economic growth and low carbon transport, supporting net zero. Whereas others including Farage would seemingly be happy to pay up the enormous bill to cancel the contracts and leave the part completed line to rot just to try and prove their point, "win" over a few NIMBYs and make us the laughing stock of the world, while not solving any of the capacity problems for N-S connectivity, with a full M6 and a full WCML.....

There is no solid evidence that HS2 will give a major boost to growth - such evidence as there is (from HS1 and other countries) suggest only limited effects on growth (if any), with some spatial rebalancing. On decarbonisation, there could be some benefit from a small modal shift from air, but road transport will be well on the way to being decarbonised by the time the line opens. And against that must be set the high level of carbon embodied in construction, and the fact that a lot of the journeys will be displaced from the existing rail network, or will be new leisure trips.

 

[Xavi]

Yep percentage professional fees are a farce. The other problem (which TBF Wild has already highlighted) is lack of in-house technical skills, to oversee contractors.

It does seem that the reset is making some of the right noises, but it remains to be seen what it delivers.

Fir clarity, percentage professional fees (% of contract value) are not used on HS2 and not the issue here. Contractors being paid a Fee (OH and Profit) on all costs, including design on a D&B contract is the root of the problem.

‘In-house’ technical is essentially the role of the professional designer / engineer where traditional procurement is used. Wild needs to put his head above the parapet and call out the problem- D&B.

== Doublepost prevention - post automatically merged: 10 Jul 2025 ==

There is no solid evidence that HS2 will give a major boost to growth

The same could be said for widening the A66. Perhaps the Romans should never have built roads.

 

[Sonik]

‘In-house’ technical is essentially the role of the professional designer / engineer where traditional procurement is used.

That's ideal, but it's still possible IMO to contract out elements of design if you have sufficient skills in-house to oversee.

The big problem (in my experience) occurs when the client is essentially just a commercial/budget holding org, which does not have the technical skills to challenge the design & optimise properly

This usually results in specification bloat, and subsequently trimming of scope to meet the budget.

 

[Xavi]

The big problem (in my experience) occurs when the client is essentially just a commercial/budget holding org, which does not have the technical skills to challenge the design & optimise properly.

I agree, it is a better position to have client oversight, but then there is still an element of doubling up and paying contractor fee on design subcontracts. Better that the professionals are employed directly by the client, then they are essentially the client’s representative carrying professional liability too.

 

[Geogregor]

D&B is at the heart of the problems in UK construction

But D&B are widely used outside the UK too. Most of Polish projects are D&B and yet it doesn't stop Poland from building a lot and fast. Poland built literary over thousand miles of motorways that way in the recent years.

 

[Snow1964]

It was carefully worded to get the past into a position where a things can only get better going forward status take place, effectively setting a low bar to current interim status.

One thing that did come out is originally the civils (structures and earthworks) were supposed to be finished by 2026, and are apparently upto 3 years behind (although reports elsewhere indicate 15% are already finished).

Now if you add 3 years (and that is generous as it is upto 3 years, not generally 3 years late), 2026 plus 3 years is 2029.

So basically anything from 2029 (and would assume some bits are ready for work to take place earlier) are installation of railway equipment (track, electrification, signalling etc). Bearing in mind things like electrification masts and components and signalling equipment cabinets are all made and fabricated off site beforehand, it seems very generous to then allow multiple years to position it and basically connect it or plug it in.

Yes there are other things like station building fittings, ventilation fans, and train testing, but a lot of that can overlap in timescale. I do tend to think the opening possibly delayed to 2035 or 2036 which has recently been bandied about, seems crazy.

 

[Geogregor]

Yes there are other things like station building fittings, ventilation fans, and train testing, but a lot of that can overlap in timescale. I do tend to think the opening possibly delayed to 2035 or 2036 which has recently been bandied about, seems crazy.

Of course it is crazy. 10 years should be enough to build line from scratch.

 

[Tetchytyke]

The HS2 lobby said he was talking nonsense, but everything Lord Berkeley said in 2020 is coming true.

Who'd have thunk it, eh?

 

[NCT]

The HS2 lobby said he was talking nonsense, but everything Lord Berkeley said in 2020 is coming true.

Who'd have thunk it, eh?

That's because Lord Berkeley said we are an incompetent country therefore we will do things an incompetent way and I will mock and frustrate every attempt at improving our general competence to typical European levels.

 

[Xavi]

But D&B are widely used outside the UK too. Most of Polish projects are D&B and yet it doesn't stop Poland from building a lot and fast. Poland built literary over thousand miles of motorways that way in the recent years.

D&B contracts in Poland typically have design developed to a later stage by the client's professional designers than in the UK, this allows client budgets to be more accurate with less risk. It's not unusual in Poland for the D&B tender to require a target price with the risk of any spend over, say 110%, carried by the contractor. This is acceptable to contractors since they have confidence in the design.

In comparison, HS2 design was not much more than a sketch on a map but the HS2 leadership (who only knew a world of D&B) naively still tendered the major works civils as target cost with the limited design. The contractors had no confidence they could deliver within the widely publicised client budgets and hence they all priced the risk (correctly) which took the target prices way above the (Treasury) budgets. Read the rest of the story in my earlier post....

== Doublepost prevention - post automatically merged: 10 Jul 2025 ==

Yes there are other things like station building fittings, ventilation fans, and train testing, but a lot of that can overlap in timescale. I do tend to think the opening possibly delayed to 2035 or 2036 which has recently been bandied about, seems crazy.

Agreed. It is indeed Wild setting a low bar.

 

[NCT]

How do recent European HSLs compare in terms of time taken from civils completion to railway opening?

 

[Xavi]

How do recent European HSLs compare in terms of time taken from civils completion to railway opening?

Verona - Padua Lot 1 was 60% complete in February 2025, when I visited in May there were still civils works to complete. Scheduled opening is Q1 2027. Wild has indeed set the bar low, just watch him 'turn the project around', which will suit current government too.

 

[slowroad]

Fir clarity, percentage professional fees (% of contract value) are not used on HS2 and not the issue here. Contractors being paid a Fee (OH and Profit) on all costs, including design on a D&B contract is the root of the problem.

‘In-house’ technical is essentially the role of the professional designer / engineer where traditional procurement is used. Wild needs to put his head above the parapet and call out the problem- D&B.

== Doublepost prevention - post automatically merged: 10 Jul 2025 ==


The same could be said for widening the A66. Perhaps the Romans should never have built roads.

You could get a lot of A66s for the cost of HS2! The best approach, irrespective of mode, is to focus on the tangible benefits and compare them to the costs, and ignore boosterish but vague claims about growth.

 

[Xavi]

You could get a lot of A66s for the cost of HS2!

In 2019 the National Highways (Treasury) budget for four A66 construction packages was £600m, which had more than doubled to £1.3bn in 2022 and was deemed to be 'poor value for money' to widen 18km of existing carriageway saving 12 minutes on a typical full length journey. The spending review did not provide an update on the 2022 cost. The outturn cost will likely be c £2bn. Can't imagine how they worked the BCR...