HS2 Ministers says there is no need for inquiry into spiralling costs
It comes after Prime Minister Rishi Sunak axed the northern leg, which was due to link Birmingham and Manchester, last week due to concerns about ballooning costs and said £36bn of the money “saved” will be invested in hundreds of other transport projects.
Phase one of HS2, linking London and Birmingham, is expected to cost at least £45bn – more than double the original estimate of £20bn which was made back in 2012.
The cost per-mile is five times higher than similar rail projects built in Europe, according to a report from Ernst & Young.
However, Mr Merriman said there is no need for a public inquiry into HS2, because spending on the project is routinely scrutinised by MPs in the House of Commons and the Transport Committee.
“I welcome the scrutiny. I used to do the scrutiny when I chaired the select committee,” he said.
“We now are focused on delivering the parts of HS2 that still need to be delivered at a better cost. The Euston part of it is particularly important for us to reset and get right.”
In a report published last week, the Department of Transport claimed the soaring costs has been “driven by a range of factors including overoptimistic cost estimations, changes to scope and schedule, and poor delivery performance”, as well as high inflation.
It came after the National Audit Office highlighted a range of issues with the management of the HS2 Euston station project in central London, claiming £106m had been wasted on designs that were not used and a two-year pause on construction had caused costs to rise.
The Government said it is now looking to “strip back the project” and abandon plans for an expensive tunnel and underground station, after wasting “four years on two unaffordable designs”.
Douglas Oakervee’s review of HS2, published in 2020, found the full Y-shaped route with legs to Manchester and Leeds would cost £108bn, but deliver at least £1.30 of benefit for each pound of public money spent.
But the Government is now claiming “benefits have dwindled” and “it is forecast that we could get less value out than we put in: possibly as little as 80p for every £1 invested by the taxpayer”.
The northern leg of HS2 was expected to cost £26bn and be opened to passengers at some point between 2035 to 2041, until it was scrapped.
Transport Secretary Mark Harper has said paying off contracts previously awarded for HS2 work will cost hundreds of millions of pounds, but it will “broadly balance out” with money recovered from selling land and property acquired for the high-speed railway.
HS2 Ltd figures show £562m was spent on land and property for HS2 north of Birmingham.
That includes £205m for Phase 2a between the West Midlands and Crewe, £196m for Phase 2b between Crewe and Manchester, and £161m for HS2’s eastern leg in the Midlands.