Axing of HS2 line sees costs soar to £2bn
The cancellation of the Birmingham to Manchester HS2 line has incurred more than £2bn worth of costs.
HS2 has revealed that it had written off £1.1bn in costs, as well as a further £1bn in accounting charges in relation to the projects reduced ambitions, as it lowers its future income.
Former Prime Minister Rishi Sunak cancelled the Northern leg of the project in Manchester in October, to redirect £36bn to other projects and keep Phase 1 from London to Birmingham as the section had “value for money”. He said HS2 would avoid £11bn of costs incurred from the cancellation.
£850m of asset writedowns were for the cancelled leg, meaning the HS2 “is no longer expected to gain an economic benefit from the preparatory work required to build these phases”.
This does not include the costs of land and property purchased, which HS2 is looking to now sell.
HS2 also lost £152.9m of work, as what was designed to be a 10-platform station at London Euston, next to the existing mainline terminus, will now be reduced to six platforms.
The former government advised that for HS2 trains to get to Euston there would need to be an injection of private investment
But MPs part of The Public Accounts Committee (PAC) are “highly sceptical” as to how or if private investment will be attracted to fuel the planned London terminus at Euston.
Issues range from how land and property now no longer needed will be disposed of, fairness to those who have had their properties compulsorily purchased; impacts on other rail projects dependent on the cancelled phases; what will be delivered with a redirected £36bn and when or how the high-speed trains will operate as part of the network.
The annual report also revealed that HS2’s former chief executive, Mark Thurston, was paid £652,569 for his final year, including a £34,345 bonus. Thurston announced his resignation in 2023 after six years.
Mark Wild OBE has been appointed as the new chief executive of HS2 and has nearly 40 years of experience in the infrastructure industry. Wild most recently serving as CEO of SGN, the gas distribution network for Scotland and southeast England.
He was also CEO of Crossrail for almost four years.
