Public Account Committee Chair Sir Geoffrey Clifton-Brown’s first annual report as Chairman scathingly criticised the continued failure of the DfT and HS2 Ltd to work together effectively to ensure adequate financial oversight of the project. He had to confess that the committee was no more certain of government’s ability to deliver HS2 than it was ten years ago.
HS2 has come to represent an outstanding example of how not to tackle major infrastructure projects. The HS2 brand has become toxic in the infrastructure world, a stark warning of what can go wrong when shortcuts are taken in going to the market without adequately worked out designs, and basic procedures for key things like risk management and cost control, are not in place. The DfT’s brand wasn’t that great in the project management world to start with, but its management of HS2 has dealt its reputation serious damage.
A large part of the blame for HS2’s problems is held to lie with the DfT, especially in the key areas of risk management and assurance, project management, and project controls. The PAC has said it is unacceptable that the final cost, scope, completion date and benefits of this now thirteen-year-long project are still unknown. In June this year the Secretary of State for Transport confirmed that the programme will be delayed once again beyond 2033. Since then, nothing has happened to improve things. The latest news is of further delay. HS2 had to admit in October that it will take four years longer than expected only recently to build one of the sections of the railway that hasn’t already been scrapped, an 18 mile section that is to link the West Coast Mainline with HS2.
The DfT and HS2 admit the project is in need of a fundamental reset which they are working on – presumably this latest delay is part of the reset. News of further delays isn’t the sort of reset the industry has been hoping for however.
The reset will also involve renegotiating contracts with suppliers, news which caused no little alarm across the construction industry and among suppliers of all the materials and services that go into this very complex project. The industry is reportedly cooperating with HS2 and the DfT as much as it can on this, but the outcome is likely to be damaging for the UK’s prospects of attracting key international suppliers and investors for other infrastructure – it will be interesting to learn what guarantees suppliers and funders will demand in future contracts to ensure this doesn’t happen to them.
The bad news is probably far from over. It is hard to find anyone not sceptical about government plans for the private sector to fund some £6 billion towards the work on Euston station. There doesn’t in fact seem to be a discernible plan, more of a vague hope at this stage. There is no sign of private sector enthusiasm for funding this, and the cost estimates are reportedly heading towards £8 billion, and could well climb beyond that.
The only positive thought we can have is that many commentators think we are unlikely to see anything as bad a procurement screw up as HS2 ever again. But what is to stop it?
Nick Barrett
Editor