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Birmingham Post
Birmingham Post
Business
Jon Robinson & Neil Lancefield

HS2 minister 'concerned' as cost rises by almost £1bn

The minister in charge of HS2 has said he is "concerned" at the rate of increases in actual and potential costs for the high-speed railway project.

Andrew Stephenson expressed his unease as he told Parliament that HS2 Ltd drew on an extra £500m of its £5.6bn contingency funds between September 2021 and January 2022.

He said the Government-owned company is also reporting a £400m increase in "potential cost pressures" - from £1.3bn to £1.7bn.

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The total is partly due to additional design costs, slower-than-expected progress in some areas, and difficulties developing Euston station, the PA news agency said.

In his latest six-monthly report to Parliament, Mr Stephenson wrote: "Since my last report, the aggregate increase in actual and potential additional costs is therefore £0.9bn (£0.5bn from increase in contingency drawdown plus £0.4bn from potential further cost pressures).

"Whilst these pressures are manageable within the target cost given the remaining contingency, I am nonetheless concerned at the rate of their increase.

"I expect HS2 Ltd to maintain its focus on delivery to the target cost."

The minister said the overall budget for Phase One of the railway between London and Birmingham remained £44.6bn, with a completion timeframe of 2029 to 2033.

He added that the impact of protester activity has "reduced significantly" following the closure of an encampment at Small Dean near Wendover, Buckinghamshire.

The total cost relating to anti-HS2 activists is nearly £122m.

The Government-commissioned Oakervee Review warned in 2018 that the final bill for HS2 could reach £106bn (at 2019 prices).

Despite it running 10s of billions of pounds over its initial budget and several years behind schedule, Prime Minister Boris Johnson gave HS2 the green light in February 2020.

The project's budget and schedule were subsequently revised.

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