The cost of HS2 could hit £66bn, according to management estimates

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The cost of building Britain’s High Speed ​​​​railway 2 is estimated at £66bn, an increase of £9bn on the previous figure, in a paper presented this year by project managers with problems.

A Department for Transport report on Tuesday will cite an HS2 board paper from June which puts the cost of the project at between £54bn and £66bn in 2019 prices, according to people familiar with the document.

That marks a significant increase since November last year, when the government revealed the official HS2 rail cost estimate between London and Birmingham had risen to between £49bn and £57bn at 2019 prices.

If inflation is taken into account, the latest estimate of £66bn would be closer to £80bn at today’s prices.

Last year’s official estimate of between £49bn and £57bn came despite the former Conservative government halving the project by dropping the northern leg of HS2 from Birmingham to Manchester, in an effort strong savings.

The government will object to the estimate of up to £66bn, saying it is not approved by the transport department, according to officials.

One official said the figure was not a formal HS2 figure but a rough estimate based on raw data. But the latest estimate highlights how Britain’s transport project costs appear to be spiraling out of control.

Mark Wild, the new head of HS2, is doing examination of the cost of the project.

He is expected to take at least four or five months to complete the task. “I wouldn’t be surprised if Mark comes up with a figure north of £80bn once he can deal with rising prices and inflation and all that,” said one industry expert.

In October former transport secretary Louise Haigh announced that Wild would “assess the current situation in terms of cost, schedule and culture, and provide an action plan to deliver the remaining work cost-effectively.” as much as possible, including the actual budget and schedule”.

Wild will also seek to renegotiate some of the contracts which officials have suggested have left HS2 “over the barrel”.

His review is likely to coincide with the announcement of the three-year Treasury budget review in June, where HS2 is likely to be repaid to take account of inflation.

HS2 has been plagued by delays and cost overruns since it was given the go-ahead by ministers more than a decade ago, with managers blaming issues including cost contracts, tunnel extensions and structural issues. on the ground.

The cost of the border between London and the north of England was set at £33bn when it was approved in 2012.

DFT and HS2 were approached for comment.