High Speed 2’s London stations will cost almost a third less to build with Mace, Dragados, Balfour Beatty, Vinci and Systra named as construction partners on the jobs.
A joint venture between Mace and Dragados has been named as the construction partner on the Euston job, announced as now costing £1.3bn to build, while the Balfour Beatty/Vinci/Systra JV has won the Old Oak Common contract, now announced as costing £1bn.
The announced prices are £350M and £300M below the prices originally quoted in tender documents listed on the Offical Journal of the European Union (OJEU) for Euston and Old Oak Common respectively.
In September New Civil Engineer exclusively revealed that the Balfour Beatty/Vinci JV was preferred bidder for the Old Oak Common job, with project promoter HS2 Ltd in advanced talks with bidders on the Euston job.
The contracts were supposed to have been announced in the Autumn, with project promoter HS2 Ltd offering no official reason for the delay. But negotiations were taking place against a backdrop of acute cost pressures on the project overall.
However, it is unclear how the new construction costs have been calculated as bidders for the construction partner roles were merely pricing a fixed-price lump sum management fee plus a schedule of rates for staff. Engineers close the to bid teams have told New Civil Engineer that they are “puzzled” by the new quoted costs.
“We bid a lump sum fee and a schedule of rates for staff, not a contract price. Nothing in the tender should have changed the price of the works,” said one engineer close to the bids. ”So how they [HS2] could come up with that kind of saving is a bit of a puzzle.
The OJEU notice makes clear that construction partners will be expected to “manage the programme of works” for the successful delivery of the relevant station to budget and programme “including procurement and management of works packages, design, construction and commissioning and associated works and services”.
They will not necessarily deliver the works themselves and they will also have to work with the existing station designers to fully develop designs and construction methodologies.
An HS2 Ltd spokesperson said the change in price reflected work done on the scope and design in the 18 months since tenders were invited that has led to greater certainty around the estimated budget and has allowed the promoter to lower the estimated value for both stations.
The spokesperson stressed that this was not unusual and the sort of work a high profile publicly-funded project like HS2 should be doing.
Three JVs had been shortlisted for the Euston job, with Mace and Dragados edging into second a bid from Ferrovial in JV with Bam Nuttall, pushing a Costain/Skanska JV into third. Costain/Skanska had been a strong favourite for Euston because it has already landed the civils contract for the station approaches and is already doing the enabling works around the station.
HS2 Ltd chief executive Mark Thurston said the chosen JV’s had a “strong track record delivering some of the world’s most challenging and exciting infrastructure projects”.
At Euston, HS2 will more than double the station’s capacity. In February 2018, project promoter HS2 Ltd appointed Lendlease to develop a masterplan for the wider site, which could support up to 14,000 new jobs and almost 4,000 new homes, as well as shops, cafes and public spaces.
Mace chief operating officer Jason Millett added: “We are delighted by today’s news. HS2 will transform Euston, delivering much-needed extra capacity and better journeys for the 44 million people that use the station every year. Mace’s experience across the whole property life-cycle and other major infrastructure projects alongside Dragados’s world-class high speed rail expertise will fully be brought to bear on this complex project of national importance.”
Meanwhile, four contractors had been shortlisted for the Old Oak Common contract with JVs between Mace and Dragados, Bam Nuttal and Ferrovial as well as a bid from Bechtel all missing out.
The announcement comes one day after new design and construction photos of Old Oak Common were unveiled.
Old Oak Common will be the UK’s best connected station, with direct services to three major airports and eight out of Britain’s 10 largest cities as well as London’s new Elizabeth Line.
Advance works contractor Costain/Skanska is already at work on both London sites clearing the way for the start of station construction. Demolition of a pair of tower blocks at Euston last month marked a big step for the site.
A mandatory 10-day standstill period will now take place before official contracts are signed.
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