The future of HS2 is firmly in the spotlight, with a review launching into the feasibility of continuing the mega infrastructure project.
Honouring his commitments to review the project, Boris Johnson has commissioned an independent review chaired by Douglas Oakervee and supported by Lord Berkeley as Deputy Chair.
The review will consider; benefits and impacts, affordability and efficiency, deliverability, scope and phasing, which will include its relationship with Northern Powerhouse Rail.
The outcome could have a significant impact on the talent pool within the industry.
So what are the likely outcomes?
1. Reduce scope and/or change the programme
HS2’s estimated cost is under huge scrutiny. Back in July Allan Cook, Chairman of HS2, reported that the total cost could exceed the current budget of £56bn by £30bn, which is a modest over spend compared with former Commons leader (and current Minister for BEIS) Andrea Leadsom’s recent claims that the bill for the high-speed rail line could top £100bn.
This means that if we look at the upper end of the cost estimates we would be looking at £1,303 per head of the UK population.
Not a figure that will do the PM any favours with the public…
So the most likely plan of action is that the project will be restructured, with a scaled back scope and amended programme.
Some of the options that have been floated include:
- Reducing the top speed the line is designed to operate for, leading to a drop in the construction cost of associated infrastructure
- Removing stations, such as terminating at Old Oak Common instead of Euston.
- Delaying Phase 2a and 2b
- Flipping the programme and building the Northern section first before the Southern section.
While changing the programme now isn’t ideal, if it means it still proceeds, at least it will provide the market with some greater certainty over future workload. Contractors and consultancies will be able to plan resources for bids and delivery of contracts that are currently uncertain.
If this option goes ahead, we may well see some changes to the project’s management team. We often see changes to the organisation structures of major projects that are re-baselined, to bring in a fresh approach.
2. A further review
Unfortunately, this is a probable scenario.
If the government decide that HS2 is worth pursuing, but it does need to be dramatically scaled back, then they may decide to carry out a further, more detailed, review into the different options before firmly committing to a new plan.
The prospect of a snap election makes this even more likely as the government won’t be eager to publicly back a scheme that could jeopardise votes. A further review could push the announcement of a final decision to back HS2 until after any potential snap election.
The dangers of this for HS2 are that companies who have already been awarded contracts and for those looking to bid for future contracts, will have good people who get fed up of waiting. Top major projects talent aren’t going to want to sit around twiddling their thumbs waiting for the outcome of a lengthy review. As a result, companies may reduce their HS2 teams by moving people onto other projects or making redundancies.
If this is the case, then other infrastructure projects could use this as an opportunity to snap up quality talent.
3. The project is scrapped
This is unlikely, but far from out of the question. Oakervee may be stringently in favour of the high speed line, but Lord Berkeley is adamantly against it.
From the industry’s perspective, cancelling HS2 entirely will mean that the market is swelled with candidates. There are already well over 7,000 people and 2,000 businesses working to deliver the project, and the UK infrastructure pipeline probably isn’t robust enough to absorb all this amount of employment.
The pros of this are obviously that other live mega projects will have the pick of the crop for talent. But on the downside, we may see a brain drain of UK engineering talent, with a rise in the number of people moving overseas to find their next role.
4. Continue with no changes
While the least likely scenario, there is a very, very slim chance that following the review the government agree to pick up the tab for the revised and increased cost, continuing with the scope and programme unchanged.
Who knows – anything could happen in politics these days!
Which option do you support?