HS2 Ltd is carrying out a review of its Phase 2b commercial case and delivery strategy as a result of ongoing construction material shortages and cost increases.
The materials crisis has been well documented with the cost of fabricated steel up 38% year-on-year. Other materials such as concrete rebar, timber and imported plywood have also seen big cost increases since the turn of the year.
He has also said that the construction of HS2 itself is having no impact on local prices and local building site productivity.
Earlier this week, in response to a written question from fellow MP Steve Baker, Stephenson said that “HS2 Ltd, the Department for Transport, and colleagues at the Department for Business, Energy & Industrial Strategy are monitoring [the materials situation] closely, but do not have any information to suggest that HS2 is having a material impact on material availability or pricing at this time”.
However, board minutes from the beginning of June – and just made public – reveal that an internal review of the northern leg will be carried out to factor in any potential impact of the ongoing materials crisis.
The minutes add: “An Executive session was to be held to review the Commercial Case and Delivery Strategy for Phase 2b, including the impact on construction materials markets.”
The board minutes also reveal that a stand-alone business case is being drawn up for the western leg of HS2 Phase 2b to Manchester.
It will be the first time that a value-for-money assessment has been carried out of the western leg.
The minutes add: “It was explained that the Outline Business Case would be the first time a value-for-money assessment of Phase 2b Western Leg would be undertaken as a standalone investment. […]
“It was noted that the Economic Analysis would be finalised for submission to the Department for Transport in June 2021 and, following assurance, in July 2021, with assured analysis of the transformational impacts delivered in September 2021, ahead of the publication of the Outline Business Case alongside the deposit of the Phase 2b Western Leg Hybrid Bill, expected in December 2021.”
Fears that Phase 2b’s eastern leg to Leeds could be mothballed have been growing since the Department for Transport (DfT) announced plans to split the phase 2b bill in two, separating legislation needed to build the western and eastern legs.
Those fears were exacerbated by recommendations made by the NIC’s Rail needs assessment, which recommended prioritising the western leg to Manchester, and May’s Queen’s Speech, which said the western leg would be taken forward in the coming year but contained no reference to the eastern leg.
According to Shapps, more details will be revealed in the government’s long-awaited IRP which will set out how major projects such as HS2, Northern Powerhouse Rail (NPR), the Midlands Engine will be phased and connected.
It was due to be published “early” this year, but was delayed due to local election purdah rules and has still not been released.
Despite the uncertainty around the IRP, HS2 Ltd has kicked off the procurement process for Phase 2b, putting its £300M ground investigation contract out to tender earlier this month.
Department of Civil Engineering https://www.ibu.edu.ba/department-of-civil-engineering/