To control soaring inflation, the Government has pushed back commences of its two most significant scheduled infrastructure projects by two years in a bid.
The transport secretary, Mark Harper, claimed that the £7bn Birmingham to Crewe leg of HS2 and the £7bn flagship Lower Thames Crossing would be postponed to enable funds to be focused on delivering the current capital program.
Harper pointed out: “Refocusing our efforts will allow us to double down on delivering the rest of our capital program. This will place our transport investments on a sustainable footing and allow us to support the government’s priorities of halving inflation, growing the economy and reducing debt.”
The statement casts into phase 2b’s doubt progress, from Crewe to Manchester, which looks reasonable to receive a knock-on delay.
Harper declared that more than £800m had been spent on planning the great Lower Thames Crossing tunnel project till now.
He stated: “It is one of the largest planning applications ever, and it is important we get this right.”
“We remain committed to the Lower Thames Crossing, and the development consent order process will be an important opportunity to consult further to ensure there is an effective and deliverable plan. In order to allow time for this process, and given wider pressures on RIS, we will look to rephase construction by two years,” added Harper.
In addition, Mr. Harper asserted that the £320m A27 Arundel bypass in Sussex and £250m A5036 Princess Way in Liverpool were encountering various challenges containing environmental considerations and ongoing scope and design changes.
Both these projects will be postponed to RIS 3 (covering 2025-2030) to provide more time.
He expressed that other projects reserved for RIS 3 would continue to be developed, in line with the statutory process, but for consideration for inclusion during RIS 4 (beyond 2030).
He also said: “Given many of these schemes were previously expected towards the end of RIS 3, this extra time will help ensure better planned and efficient schemes can be deployed more effectively.”
The big decision to postpone advancement on HS2 Birmingham to Crewe looks set to have an immediate impact on Balfour Beatty and Kier.
Balfour Beatty is working on its £52m progressive environmental works package, while Kier has also been mobilized to provide a £50m highways and utility facilitating works contract for this stage.
Moreover, the bidders hanging on tenterhooks since September for the announcement of the £500m design and delivery partner role award to supervise the construction of phase 2a will possibly face an even longer delay to find out if they have succeeded.
Teams in the chase comprise 2 Connect Joint Venture (AECOM /Costain Integrated Services), AMS Joint Venture (Atkins /Mace Consult / SYSTRA), and Jacobs UK.
While a project pause is far-fetched to save cash over the complete course of the project, it will enable the Government to spread the cost over a more extended period, making it more affordable by declining annual expenditure.
CEO of the Association for Consultancy and Engineering (ACE), Stephen Marcos Jones, expressed: “I think every sensible person knows that global events have driven inflationary pressures to record highs.
“But we have already spent significant sums on the design and delivery of this transformational major project.”
He also asserted: “Scaling back ambitions at this stage will mean the economic and social benefits of HS2 for communities across the UK is further watered down – and major delays like this are actually going to cost more in the longer term.
“In a nutshell, the delays announced today are, quite simply, an absolutely false economy.”