HS2 Project Undergoes Major Reset: What You Need to Know

The UK’s High Speed 2 (HS2) rail project is in the midst of a significant reset, with officials admitting they don’t yet know the final cost. Phase 1, the section from Birmingham to London, is facing delays, cost overruns, and contract issues, and officials are scrambling to redefine the project’s path.

What happened

The Department for Transport (DfT) confirmed on 19^th December 2024 that HS2 is undergoing a full programme reset. The DfT stated it would take until mid-2026 at the earliest to provide an updated cost estimate for Phase 1, which had been expected to cost between £45bn and £57bn. A leaked document suggested the cost could now exceed £80bn.

Why it matters

The reset is critical for determining whether the project can stay on track, both financially and timeline-wise. The complexity of the programme and mismanagement of early contracts have led to skyrocketing costs. If the reset isn't successful, the economic benefits of HS2 could be at risk.

What’s next

HS2 Ltd's incoming CEO, Mark Wild, will lead the reset efforts, with a focus on creating a new baseline for the programme. The DfT will also need to agree on cost estimation methods and how to address remaining risks.

• £32.8bn already spent on Phase 1

• New cost estimates expected by mid-2026

• The National Audit Office (NAO) recommended a reset in July 2024

The big question

Can HS2 complete Phase 1 on time and within a realistic budget? Officials believe a reset is necessary to avoid repeating mistakes from past contract mismanagement.

How they’re doing it

HS2 Ltd is working on a new methodology to estimate costs and deliver the project. Key to this is tackling issues with main works civils contracts, which have caused delays. Wild believes that without a reset, more problems will arise in future stages.

Bottom line

HS2’s reset is a crucial step towards getting the project back on track. However, with the final cost and schedule still uncertain, it’s unclear whether the project will ultimately deliver the promised benefits. The focus will now be on refining cost estimates and managing risks more effectively.

What they’re saying

• Transport Secretary Heidi Alexander: "The leaked figures are not accurate or reliable."

• Mark Wild: "The real work is to re-baseline this schedule and get everyone back on track."

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