The budget for phase one of the planned High Speed Two rail line (HS2) project has gone up by £800m ($1bn) due to issues relating to asbestos and the reshaping of Euston station, about a month after construction officially began.
The first phase of the rail line will link London to Birmingham.
Andrew Stephenson, minister of state at the Department for Transport, said “HS2 is currently reporting cost pressures of £0.8bn. If not successfully remediated, these pressures will be drawn against the company’s delegated contingency” of £5.3bn.
He explained that works to prepare the line of route for construction “have encountered more significant challenges than anticipated, such as the need to safely remove more asbestos than expected.”
He added that work at Euston station is also causing “significant cost pressure.” Both issues are adding £400m each to costs.
Stephenson explained that for phase one, HS2 is projected to cost £40.3bn, which is at the level of its target. However, he warned that “this projection remains uncertain at this early stage in the project’s lifecycle and does not yet reflect the impact of COVID.”
Of the £40.3bn, £9.6bn has been spent to date, a further £11.5bn is contracted, and £13.9bn is yet to be contracted.
Speaking about the impact of the coronavirus pandemic, Stephenson said “at some sites COVID-safe practices have necessarily reduced productivity to a limited degree.”
The minister also hinted that costs may rise for Phase 2b, which links to Manchester and Leeds, as “ongoing design work suggests some further pressure on the most recent estimates.”
Earlier this year, the government’s handling of the troubled infrastructure project came under fire in a new report by the National Audit Office (NAO).
The NAO said it was not even possible to say with certainty how much the final cost of HS2 could be.
The north-south line is the government’s biggest infrastructure project, aimed at connecting London, Leeds and Manchester via the West Midlands.
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