Continues construction material shortages and cost rises, caused HS2 Ltd to start a review of its Phase 2b commercial case and delivery strategy.
The materials crisis includes remarkable increases in the cost of fabricated steel (up 38% year-on-year) and also concrete rebar, timber and imported plywood have also seen big cost increases since the turn of the year.
Transport minister Andrew Stephenson has repeatedly said: “Materials shortages are having no impact on major projects including High Speed 2 (HS2).”
He has also asserted: “The construction of HS2 itself is having no impact on local prices and local building site productivity.”
Earlier this week, in response to a written question from fellow MP Steve Baker, Stephenson said: “HS2 Ltd, the Department for Transport, and colleagues at the Department for Business, Energy & Industrial Strategy are monitoring [the materials situation] closely, but do not have any information to suggest that HS2 is having a material impact on material availability or pricing at this time.”
The board minutes from the start of June, that has been released recently, illustrates an interior review of the northern leg for factoring in any potential impact of the ongoing materials crisis.
“An Executive session was to be held to review the Commercial Case and Delivery Strategy for Phase 2b, including the impact on construction materials markets,” add the minutes.
The western leg of HS2 Phase 2b to Manchester, is also going to have a stand-alone business case and it will be the first time that a value-for-money assessment has been carried out of the western leg.
According to minutes: “It was explained that the Outline Business Case would be the first time a value-for-money assessment of Phase 2b Western Leg would be undertaken as a standalone investment. It was noted that the Economic Analysis would be finalized for submission to the Department for Transport in June 2021 and, following assurance, in July 2021, with assured analysis of the transformational impacts delivered in September 2021, ahead of the publication of the Outline Business Case alongside the deposit of the Phase 2b Western Leg Hybrid Bill, expected in December 2021.”
Concerns about that the Phase 2b’s eastern leg to Leeds could be mothballed have been raised following the Department for Transport (DfT) announcement about the plans to split the phase 2b bill in two, separating legislation needed to build the western and eastern legs.
Those fears were exacerbated by recommendations made by the NIC’s Rail needs assessment, which recommended prioritizing the western leg to Manchester, and May’s Queen’s Speech, which said the western leg would be taken forward in the coming year but contained no reference to the eastern leg.
Transport secretary Grant Shapps has since said: “The government will complete HS2 and include HS2 on the eastern leg to Leeds.”
He also added: “More details will be revealed in the government’s long-awaited IRP which will set out how major projects such as HS2, Northern Powerhouse Rail (NPR), the Midlands Engine will be phased and connected.”
The intended data were scheduled to be released early this year, but was delayed due to native election purdah rules and has still not been published.
While, still there are some uncertainty about the IRP, HS2 Ltd.’s procurement process for Phase 2b has been commenced and its ground investigation contract, which worth almost £300M, is going to tender earlier this month.