The decision on HS2, and the future implications for British infrastructure projects

On Tuesday 11th February 2020, 5 months after Boris Johnson announced the Oakervee review into High Speed 2 and 11 years after the project was even proposed, the government finally declared that the project would indeed go ahead. Despite growing reservations in recent years over the mounting delays and the increase in the estimated cost from a budget of £56bn to a gargantuan £106bn, preparatory works will continue with the aim to complete the first phase and have trains running by 2028. The first phase will consist of a direct line from London Euston to Birmingham Curzon Street, with additional stops at Old Oak Common and Birmingham Interchange. The second phase, broken into two sections with the first extending from Birmingham to Crewe, and the latter branching off to service the East Midlands, Leeds and York, has yet to receive Parliamentary approval. It will be sure to draw further fire from both opponents to the scheme in Parliament, and from public pressure groups and lobbyists.

Despite announcing the review barely a month after taking office as PM, it never appeared likely that Johnson would ultimately take the proposal behind the metaphorical barn and shoot it – instead the review has given Johnson a way of dodging some of the criticism that was sure to come from giving the proposal the green light. Despite endorsing the project, the review made clear that the endorsement came due to the lack of “shovel ready alternative investments” that would expand UK rail capacity between the north and south, in addition to the £9bn already sunk into the project. Partially insulated from criticism Johnson has been free to approve the project, albeit with changes designed to reign in costs and delays. These include a new ministerial position, which will be responsible for the project and its management on a full-time basis, non-executive directors have been overhauled and the development of the London Euston terminal has been spun out to a new management team.

There has also been a recent fresh twist with the revelation that China Railway Construction Corporation, a part-state-owned Chinese contracting giant, has been in talks with HS2 Ltd regarding a deal for the company to potentially step in and build the line. Such a deal would, according to CRCC, see the UK save billions in construction costs, with the firm aiming to complete the work within 5 years. Despite these claims however, the government has so far had no part in the talks. It also seems unlikely that CRCC will be able to take over all work on the line, given the advanced stage of preparatory work – instead a “joint venture” seems a more likely option.

In addition to this, there would be the added political difficulties of the UK government allowing a Chinese firm to build a major piece of UK infrastructure, particularly given the recent decision by the government to allow Huawei, a Chinese telecom firm, to “continue to be used”  in the UK’s 5G networks. The decision was said to provoke dismay from the US intelligence services, which have lobbied extensively for European countries to ban Huawei from working on their networks, and ““apoplectic” fury” from Trump himself in a call to Johnson.

Written by Andrew Harris

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