The
cost
of
building
Phase
1
of
HS2


between
London
and
Birmingham
could
now
be
as
much
as
£66.6
billion,
when
inflation
is
taken
into
account.

In
2012
the
government
had
estimated
that
the
whole
network,
including
the
lines
to
Manchester
and
Leeds
which
have
now
been
scrapped,
would
cost
£32.7
billion
at
2012
prices.

It
added
at
the
time
that
the
benefit
cost
ratio
for
HS2
was
between
£1.80
and
£2.50
for
every
£1
spent.
The
BCR
had
been
revised
downwards
slightly
due
to
the
economic
climate
but
‘remains
convincing’.

The
latest
figure
for
the
cost
of
Phase
1
alone
has
been
revealed
by
HS2
executive
chair
Sir
Jon
Thompson,
who
has
been
giving
evidence
to
the
Commons
Transport
Committee
today.

He
said:
‘The
costs
of
delivery
are
more
than
the
government
budgeted,
and
that
is
before
you
begin
to
account
for
the
extraordinary
construction
inflation
over
the
last
three
years
or
so.
We
now
estimate
that
Phase
1
will
cost
between
£49
billion
and
£56.6
billion
before
inflation,
so
that’s
at
a
2019
price,
against
the
government’s
budget
of
£45
billion.’

Inflation
since
2019
could
boost
the
final
expenditure
between
Old
Oak
Common
in
west
London
and
Birmingham
Curzon
Street
to
£66.6
billion.

The
future
of
the
London
section
from
Old
Oak
Common
to
Euston
is
still
unclear.
It
was
paused
for
at
least
two
years
in
late
2023,
when
the
government
said
it
would
be
seeking
private
section
investment.

Sir
Jon
said:
‘On
Old
Oak
Common
I
think
we
have
made
excellent
progress.
We
are
now
beyond
50
per
cent
complete,
made
slightly
more
complicated
by
the
outstanding
decision
on
tunnelling
from
Old
Oak
Common
South
towards
Euston.’

He
added:
‘It
is
the
Government’s
long-standing
policy
that
infrastructure
estimates
are
only
updated
at
Spending
Review
points,
that’s
my
understanding
of
it.

‘So
that’s
why
we’re
still
working
to
2019
prices
and
the
whole
conversation
is
about
2019,
which
to
be
frank
with
you
is
an
administrative
burden
of
some
significance
in
the
organisation.

‘The
cost
estimate
and
the
budget
that
was
set
in
the
first
place
were
too
low,
in
my
opinion.

‘There
have
been
some
changes
to
the
scope,
there
definitely
has
been
some
poor
delivery
on
our
part,
and
fourthly,
there’s
inflation.

‘It’s
worth
remembering
that
between
2010
when
prime
minister
Gordon
Brown
launched
HS2
and
2019
when
the
current
budget
was
set,
the
scope
of
HS2
has
been
changed
significantly
by
a
whole
series
of
ministers.’