HS2 Ltd has renegotiated two major contracts in a bid to reduce the costs of the project.
New contracts have been signed with EKFB and Align which account for more than 100km of the HS2 route between London and the West Midlands between them.
EKFB, which is a joint venture of Eiffage, Kier, Ferrovial Construction and BAM Nuttall, is providing civil engineering works on an 80km section between the north portal of the Chiltern tunnel in Buckinghamshire and Long Itchington Wood in Warwickshire.
Align, a joint venture of Bouygues Travaux Publics, Sir Robert McAlpine, and VolkerFitzpatrick, is building 24km of the route in outer London and south Buckinghamshire. Major structures include the Colne Valley viaduct and Chiltern tunnel, which are the longest structures of their kind on HS2.
The previous contracts were agreed before construction had formally started in 2020 and they were named by chief executive Mark Wild as one of the major problems to be addressed as part of his initial ‘reset’ advice to the transport secretary last year.
HS2 Ltd said the original contracts had been ‘ineffective at encouraging efficient delivery of civil engineering works, placing almost all risk on the taxpayer by failing to incentivise schedule or cost targets’.
The original £15 billion budget allocated in 2020 for the main civils contracts on HS2 Phase 1 had been spent by 2024, although works were far from complete.
The company said the new contracts ‘reset incentives’ by rewarding efficiency and also controlling costs.
HS2 Ltd is now working to comply with the revised target of £93.2 billion which was announced by the government in May this year.
Rail minister Lord Hendy 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.’
Mark Wild added: ‘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.’
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