HS2 Ltd has announced a successful renegotiation of contracts with two civil engineering joint-ventures as part of the programme’s wider reset.
New commercial contracts have now been signed with both EKFB and Align, collectively amounting to more than 100km of the HS2 route between London and the West Midlands.
EKFB, a joint venture of Eiffage, Kier, Ferrovial Construction and BAM Nuttall, will supply civil engineering works along an 80km section of the high-speed railway between the north portal of the Chiltern Tunnel in Buckinghamshire and Long Itchington Wood in Warwickshire, whilst Align, a joint venture consisting of Bouygues Travaux Publics, Sir Robert McAlpine, and VolkerFitzpatrick, will construct 24km of the route in outer London and south Buckinghamshire, with major assets including the Colne Valley Viaduct and Chiltern Tunnel – the longest structures of their kind on HS2.
Previous contracting models with civil contractors was established before construction on the project officially began in 2020, and was since identified by project leader Mark Wild as one of the ‘major issues’ to be addressed during his initial advice to the Secretary of State for Transport last year.
Both contracts previously awarded have been deemed ‘ineffective’ as far as the encouragement of efficient delivery of civil engineering works, which HS2 Ltd has stated placed ‘almost all risk’ on the taxpayer by ‘failing to incentivise schedule or cost targets’. By 2024, the original 15 billion GBP civil works contracts budget first allocated in 2020 for HS2 Phase 1 had been spent – despite works not being complete.
The two new contracts will reset incentives by rewarding efficient delivery and cost control by way of a revised payment structure with contractors, which will seek to ensure they are incentivised to deliver both on budget and on time. This approach is expected to help to deliver HS2 at the lowest reasonable cost, as well as provide greater confidence that HS2 Ltd is able to deliver the remaining programme in line with the 93.2 billion GBP Cost ambition announced in May.
Lord Hendy, Minister of State for Rail, said:These new contracts are an important milestone in the reset of HS2. The waste and mismanagement of the past are behind us - we are now laser-focused on delivering this project efficiently and responsibly for taxpayers.
By resetting contractor incentives and rewarding cost control, we are making sure every pound spent delivers real value and that the project is built at the lowest reasonable cost.
Under Mark Wild's leadership and with close ministerial oversight, HS2 is being built faster and more efficiently than ever before - across the West Midlands and West London over the next decade, while sustaining 31,000 jobs across the country.
Renegotiations with HS2’s two other civil engineering joint ventures are now ongoing. Currently, The Balfour Beatty VINCI (BBV) joint venture is responsible for a 90km section of the railway in the West Midlands, while Skanska Costain STRABAG is building the 21km London tunnels section of HS2 beneath the capital from West Ruislip to Euston.
The wider project reset is set to continue into spring 2027, at which time a new ‘baseline’ roadmap will be finalised.
Mark Wild, Chief Executive of HS2 Ltd, said:This is good news, but there’s more to do, Bringing an end to HS2’s cost over-runs and delays is a shared ambition, and I’d like to thank every one of the parent companies at both EKFB and Align for their willingness to negotiate and their commitment to doing the right thing for British taxpayers.
Investing in world-class infrastructure is vital to securing economic growth, but it cannot come at any cost. Today’s announcement represents a significant step forward in our mission to regain control of HS2.
