Contractors involved in the first phase of HS2 have expressed their dismay at Prime Minister Rishi Sunak’s decision to cancel the second phase of the project, while stressing the need for effective delivery of alternative rail investment plans of the government
Mace Group chief executive Mark Reynolds, who also co-chairs the Construction Leadership Council, argued that the government’s failure to fully deliver HS2 will have a “chilling effect on the UK construction industry”.
And Balfour Beatty chief executive Leo Quinn said scrapping the northern part of HS2 “presents challenges to the ability of the industry, and the UK, to improve, train and retain the talent generation needed to deliver the infrastructure that this country must have.” .
Reynolds said a fully delivered HS2 would have provided more than £135 billion in economic benefits for the Greater Manchester area between now and 2050. In a video interview with Bloomberg, he said the cancellation yesterday (October 4) of the Birmingham-Manchester stage. of HS2 “undermines a massive amount of confidence in UK Plc. The fact is that the government is unwilling to invest in what is the backbone of a rail network that delivers high-speed, low-carbon connectivity across the country”.
Paul Hamer, chief executive of Sir Robert McAlpine, said: “With HS2 awarded as the UK’s flagship leveling project, it is disappointing that the economic and political climate has deterred this ambitious project to improve and rebalance the overall economic health of the country. from start to finish.”
Reynolds welcomed Sunak’s pledge to keep an HS2 terminus at Euston as part of a business and development zone, although he warned that “the detail will be critical”.
He added: “It is important that we continue to deliver the station at high speed, providing clarity to the industry on the line of work and avoiding further disruption to the local community.”
Speaking at the Conservative Party Conference in Manchester, Sunak said scrapping HS2 north of Birmingham would save around £36 billion. He announced that “every penny” of this would be reinvested “into hundreds of new transport projects in the North and Midlands across the country”. This will be known as the Northern Network.
Quinn welcomed the initiative and noted: “Balfour Beatty is always keen to support the delivery of vital UK infrastructure projects.”
In an official statement from Mace, Reynolds described Network North’s announcement as “a bold statement”, but was more critical in his interview with Bloomberg.
“When they [the government] talk about small regeneration improvements, that doesn’t help either,” he said. “It’s like your body: If you don’t have your main artery, you can’t really have any blood vessels. Out of order.”
Calling for a “long-term view of infrastructure investment”, Hamer said: “While it is promising for the industry and the country to see alternative infrastructure investments proposed, proposals must now be accompanied by plans to solid deliverables to ensure the intentions are viable and we’re continuing to build towards a better future, rather than taking a step back.”
Despite Reynolds’ warning of a “chilling effect”, Balfour Beatty’s Quinn insisted yesterday that Sunak’s announcement “has no material impact on Balfour Beatty’s order book”. This was reflected in Liberum’s market analysis, which stated that a “material impact over the forecast horizon” was unlikely for UK-listed contractors involved in the first phase of HS2.
A ‘terrible signal’: industry bodies react
The chairman of the National Infrastructure Commission, Sir John Armitt, said the decision not to extend HS2 from Birmingham to Manchester was “deeply disappointing, leaving a huge gap in the UK’s rail strategy around on which several regions of the city have been basing their economic growth plans.”
Transport for the North chairman Lord McLoughlin described the HS2 announcement as “naturally disappointing”, adding that “it will be seen by many as a missed opportunity for the region and the country in its joint”, while Midlands Connect chairman Sir John Peace said the organization was “disappointed and disheartened”.
Similarly, Rail Industry Association (RIA) chief executive Darren Caplan described the downsizing as “defeatist”, adding that it “sends a terrible signal to potential overseas investors that the UK simply cannot deliver major national transport infrastructure schemes.”
Armitt welcomed Network North’s announcement but warned it was “still unclear how the scheme collection was announced […] will address the gap left by HS2.”
He added: “It will be up to the government to show it can turn the schemes into a coherent, long-term rail strategy and deliver it in a cost-effective way, in partnership with local leaders.”
Meanwhile, Institution of Civil Engineers director of policy Chris Richards said: “The lesson… is that the UK needs to change the way it approaches infrastructure planning and delivery. The country’s stop/start approach to major infrastructure benefits no one. We need long-term, evidence-backed plans, long-term thinking about funding options and strong, coherent policies to achieve the desired outcomes “.
Civil Engineering Contractors Association chief operating officer Marie-Claude Hemming also urged caution over the Network North schemes.
“While the Prime Minister has promised to reinvest the HS2 money into alternative schemes, we as an industry know how unlikely this is to materialize and affect communities in a game-changing way which high-speed rail would have provided,” he said. .
The RIA’s Caplan added that the government “must safeguard the full route of HS2 for future generations and pass the King’s Speech Bill next month”. He said there was also a need to “rebuild trust with the rail industry”, for example by providing “assurance” that the £36bn investment will go ahead, adding that the government “must redouble its efforts to provide certainty in the railway moving forward with railway reform”.
