The bill for building the HS2 high-speed railway could pass £80bn at current prices, as estimated costs jumped by 15% since the last parliamentary report just over a year ago.
An update from ministers put the budget at building the line from London to Birmingham at between £54bn and £66bn, quoting figures supplied to the Department for Transportby HS2 Ltd.
The figures are in 2019 prices, which adjusted for inflation would now be between £67bn and £81.7bn. The cost estimates include the price of building an HS2 station at Euston, where the budget alone is expected to be about £5bn.
HS2 Ltd’s last formal estimate for what was initially known as Phase 1 was in the range of £49bn to £57bn last year. The £66bn figure is understood to have been given to the DfT in the summer, based on cost increases reported by suppliers to HS2, although it is seen as a rough calculation to be treated with caution before a full review being carried out by the new chief executive, Mark Wild.
The DfT’s own estimates of the cost were expected to be lower. Last year, ministers said they disputed the HS2 Ltd estimate by about £3bn-£4bn.
Wild, who officially started in early December and helped Transport for London deliver Crossrail to its own much-revised budget and timescale, is expected to report to the government next year on HS2’s cost and schedule.
The growing costs were set to be revealed as the DfT announced that the chair of HS2 Ltd, Sir Jon Thompson, would step down in spring. He had led the project until Wild’s arrival.
Heidi Alexander, the transport secretary, said Thompson had provided “strong leadership during challenging times for the project”, adding that the new chief executive and eventual replacement chair would be “tasked with gripping budgets and schedules and delivering the line as cost-effectively as possible”.
Thompson recently made headlines by revealing that the cost of a “bat shed” being built beside the line had reached £100m.
The northern leg of HS2 was axed last year by Rishi Sunak amid concerns about ballooning costs.
Politicians in the north and Midlands have urged the government to build a similar railway line to ease capacity constraints between Birmingham and Manchester.
Labour recently committed funds to complete tunnelling work in London paused by Sunak, ensuring HS2 will run to Euston.
A Department for Transport spokesperson said: “These estimates are out of date and don’t take into account the urgent measures this government took to get the project back under control or the previous government’s decision to cancel Phase 2 and attempt to secure private funding for Euston.
“The transport secretary has asked HS2 to urgently provide updated and clearer estimates of the project as soon as possible and we have made it the number one priority of the new Chief Executive to drive costs down.”
