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Sacked HS2 boss says cost estimate is ‘enormously wrong'

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A former boss of HS2 has claimed that early cost estimates given to MPs were “enormously wrong”.

Former HS2 Ltd head of property Doug Thornton claims that MPs approved plans which underestimated the value of necessary property acquisition by “hundreds of millions”, in an interview with BBC’s Panorama. This, Thornton claimed, included underestimating the value of private properties by up to £200,000 and some larger properties potentially by millions. 

HS2 Ltd rejects that MPs were purposefully misled, with a spokesperson saying that it has followed the correct process to keep Parliament updated on budgetary changes.

When the joint chairman of HS2 and the troubled Crossrail project, Sir Terry Morgan, resigned earlier this month he warned of possible cost overruns on both projects.

Earlier this year, spending watchdog, the National Audit Office, found estimated property costs were below the real amounts eventually paid but concluded that HS2 was not in the wrong.

Thornton, however, believes early cost estimates were purposefully misleading to get backing from MPs.

“I have never seen anything like it”, he told the BBC. “I was absolutely appalled […] that numbers could be advanced in such a loose and slapdash fashion.”

“There was a gap of almost 100% in terms of the wrong numbers of properties that the organisation had not budgeted for.

“We started to talk about it to our finance team, we talked about it to HR, we talked about it to line managers, so it was there, we were calling it out.” 

HS2 Ltd chief executive Mark Thurston told Panorama that he is not worried about cost overruns.

He added: “It’s perfectly normal that in a scheme as vast and as complex as HS2, that over time we have a greater understanding of the alignment of the route, how many land parcels and land areas it affects and what the full extent of the acquisition programme needs to be.”

Thurston recently told New Civil Engineer that there are cost pressures on the projects civils packages. The programme interviewed consultant Michael Byng, who specialises in cost estimates for rail projects. He said that the cost of Phase 1 between London and Birmingham was £56bn, not HS2’s figure of £27bn. HS2 refuted Byng’s estimates.

Residents and business owners along the route of Phase 1 spoke to the programme, including a bakery in north west London, the owner of a manor house in Buckinghamshire and the owners of a wood recycling firm in the Midlands. All said the property value and compensation offered by HS2 Ltd was inadequate and business owners said slow compensation payment risked their livelihoods. HS2 Ltd told the programme that it was still examining claims.

In June this year New Civil Engineer reported that the main civils packages were collectively coming in at around £1bn over the target cost to build the line. As a result the notice to proceed, the point at which the costs are agreed and construction of the line can start, was pushed back three months from February to June next year. The official price tag for the project is £56bn.

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Readers' comments (1)

  • Philip Alexander

    Perhaps my frequent (!) remarks about the likely cost of HS2 being over £100 BILLION will now not be so lightly dismissed by other correspondents. It is patently obvious to any honest civil engineer (who seem to be in short supply inside HS2) with even a limited amount of experience that the current so called "estimate" is wildly low, deliberately so in order to lure the politicians (who seem to want to be lured anyway) into funding this ludicrous scheme. At anything over £85 BILLION cost, the BCR becomes negative and that is assuming the opening dates can be met thereby ensuring revenue and cashflow to start on time.
    The experience of Crossrail should be salutary here because when TfL was saying it would be a year late, the revenue shortfall was over £300 million. So late opening does become an issue when working out a BCR and if HS2 is built (heaven help us) there is no way that the opening dates can be met. We now have TfL saying they don't even know when the thing will open. How pathetic.
    So HS2 will be Crossrail multiplied 8 fold. Good grief.

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