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Chancellor kicks off £11.8bn bidding process for HS2

High Speed 2 contracts worth up to £11.8bn are finally out to tender after chancellor George Osborne opened procurement for the first phase of the mammoth project.

Seven contracts for the main civils works - the surface route and tunnels - along the phase one route from London to Birmingham have been officially advertised.

Interested parties have until 18 November to complete pre-qualification questionnaires. Suppliers can express an interest in all seven packages at this stage.

At the tender stage - expected in spring 2016 - prequalified firms can bid for up to four packages, and can be win up to two.

There is also the possibility of additional contracts, covering the route north of Birmingham to a certain point such as Crewe or Stoke, being put to the pre-qualified firms at some stage.

Beyond this, the bid process for two further tranches of major contracts will be launched over the next two years, one will be for stations and the other for railway systems.

Construction will begin once the Phase 1 Hybrid Bill is given Royal Assent, with construction of this phase expected to finish
by 2026.

The contracts

S1 – Euston Tunnels and Approaches (£600M to £900M)

S2 – Northolt Tunnels (£900M to £1.4bn)

C1 – Chiltern Tunnels and Colne Valley Viaduct (£800M to £1.3bn)

C2 – North Portal Chiltern Tunnels to Brackley (£800M to £1.3bn)

C3 – Brackley to Long Itchington Wood Green Tunnel South Portal (£800M to £900M)

N1 – Long Itchington Wood Green Tunnel to Delta Junction/Birmingham Spur (£900M to £1.5bn)

N2 – Delta Junction to West Coast Main Line Tie-in (£800M to £1.3bn)

“The start of the civil engineering bidding process is a major milestone for HS2 as we continue to move towards the start of construction in 2017,” said Simon Kirby, chief executive of the project’s promoter HS2 Ltd.

“Over the next decade, the winners of these contracts will go on to build 230km of bridges, tunnels and earthworks and create thousands of jobs across the construction industry.

“Together we will transform intercity rail travel in the UK, build specialist skills and expertise across the country, create at least 2,000 new apprenticeships and build a legacy to inspire the next generation of young engineers.”

Osborne launched the procurement process during a tour of China. There will be an HS2 partnering day between British and Chinese firms to explore joining up on bids for contracts.

In May, NCE revealed how European contracting giants were playing a major part in almost all HS2 construction bid teams.

HS2 Ltd chairman Sir David Higgins has said he would be amazed if there was not at least one Chinese-led consortium in the final mix.

Osborne reinforced that view last week.”I’m here in China opening the bidding process for construction contracts worth £11.8bn, which will propel HS2 forward,” he said.

“We are truly entering a golden era of cooperation between our two countries, and it’s crucial that businesses and communities from across the UK feel the full benefit of forging closer economic links with China.”

Osborne also outlined £24bn of investment opportunities in the North of England, including developments at Leeds South Bank and Manchester Place, where HS2 stations are planned.  

Association for Consultancy & Engineering chief executive Nelson Ogunshakin welcomed the launch of the bid process but warned of the dangers of linking foreign investment to the project.

“We would emphasise to the chancellor the strategically significant nature of this project and [that] in his rush to secure foreign investment, he risks undermining the ability of UK firms to benefit from the work,” said Ogunshakin.

“We must ensure that UK engineering companies do not miss out on what would be an outstanding opportunity to develop the skills of their workforce, increase their expertise, and export what they have learnt to the global market. This would be more difficult to accomplish if a deal was struck to tie foreign investment to the delivery of the project.”

An HS2 Ltd spokesman insisted the investment opportunities and the construction contracts were separate. “We are not seeking Chinese money to build HS2,” he said. “We are interested in expertise and open to bids from companies all over the world.”

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