UK Parliament grills HS2 over Euston billions costs overrun
Work on the London Euston terminal of the HS2 high-speed rail project has been paused, along with several other parts of the one hundred billion pound (about 115 billion euro) project. A recent report from the UK National Audit Office (NAO) has revealed that the cost pressures on HS2 are significantly higher than previously reported, reason for a questioning by the Parliament’s Public Accounts Committee.
During a deeply probing session of the influential Public Accounts Committee, senior personnel from the project, and from the government’s Department for Transport, were questioned as to why the Euston station project was significantly over budget, and why there were still questions over the eventual design.
Liberal Democrat MP for Richmond Park in London, Sarah Olney, questioned Permanent Secretary at the Department for Transport, Dame Bernadette Kelly, about the discrepancies in the reported costs. Kelly explained that a four hundred million pound (470 million euro) cost pressure was identified prior to a revised cost figure of 4.8 billion pounds (5.5 billion euro) was revealed. That figure, noted one committee member, would make HS2 Euston the most expensive station in the world, by a considerable margin. It was also noted in the proceedings that, even though the project has been paused, a staggering two hundred million pounds (235 million euro) will still be spent in bringing works to a stop. There is still some doubt over whether the final station will be delivered with ten or eleven platforms – a design criteria that has significant impact on the build programme.
Making it up as you go along?
Building a ten-platform single-stage design at Euston is expected to be a much cheaper option than a two stage, eleven platform configuration. Regardless of the operational implications, that may be the only way to get HS2 into central London, in the light of the UK government’s abrupt pause on the project, leaving only the core section between Old Oak Common (in the west of London) and Birmingham under construction. Parliamentary reports have consistently acknowledged the challenges in relation to the Euston station cost pressures. The NAO report highlights the need for a review of the contingency for further work. Those revelations were put under extreme scrutiny by the cross-party members of the Public Accounts Committee, who expressed little patience with the apparent lack of foresight on the project, specifically on cost matters surrounding Euston.
In last week’s session, Alan Over, the Director General of High Speed Rail Group and the appointed Senior Responsible Owner for HS2, was asked by Liberal Democrat MP Sarah Olney about the extent of the overspend on HS2. In response, Over explained that an iterative design process was underway, which only recently led to a bottom-up costing that uncovered the cost pressure. Sitting alongside him at the witness table, Mark Thurston, the Chief Executive of HS2 Ltd, further explained that a full 3D model was not available until the end of last year, and that they now have the most comprehensive and confident estimate for the costs of Euston. The response suggests that the delay in the overspend being uncovered was due to the iterative nature of the design process and the lack of a complete output from the construction partner until late last year. That might be interpreted as making it up as you go along, but that was not an opinion expressed so bluntly by the Committee.
Two billion spent, no one held to account
Sarah Olney, who represents a constituency in south London, and like the other Committee members is not directly affected by the works at Euston, asked why the budget for a redeveloped Euston station was set at 2.6 billion pounds despite an original estimate of three billion (3.00 – 3.5 billion euro). Thurston explained that the 2.6 billion figure was seen as a “stretch target” and was agreed to be the budget for first phase of the HS2 project, of which Euston was a significant part. Thurston also pointed out that at the time, there was still much to learn about the full extent and scope of Euston, and it was recognised that a reassessment of costs would be necessary once the design was completed and a construction partner was appointed.
In their independent report, the National Audit Office has also acknowledged that both HS2 and the Department for Transport accepted there was much to learn about the full extent of Euston and the costs involved. Despite the overspend, Thurston stated that they now have the most comprehensive and confident estimate they have ever had on Euston. That came as little comfort to Jonathan Djanogly, an MP from the ruling Conservative Party. He asked both Dame Kelly from the DfT, and Mark Thurston from HS2 Ltd, whether anyone has been held accountable for the overspend on the Euston station project.
Dame Bernadette Kelly responded that they need to work out what the right next steps are and what options are available to get to a better outcome. Mr. Djanogly interpreted this as a no. Mark Thurston clarified that they have “only” spent two billion pounds (2.7 billion euro) on Euston so far. He called that investment “no-regrets” work. The Committee can draw their own opinions, having completed a site visit prior to the sitting.