Transport secretary Heidi Alexander has called time on 鈥測ears of mismanagement, flawed reporting and ineffective oversight鈥� on the HS2 high speed rail project.
She told the House of Commons today that 鈥渂illions of pounds of taxpayers money has been wasted by constant scope changes, ineffective contracts and bad management鈥�.
Alexander also raised the issue of subcontractor PAYE fraud allegations that were first revealed by 91黑料网 Index on 15th May this year and picked up by the national press 10 days later.
鈥淭here are also allegations that part of the supply chain have been defrauding taxpayers and I have been clear these need to be investigated rapidly and rigorously. If fraud is proven the consequences will be felt by all involved,鈥� she said.
She said that the government had accepted the recommendations of a review of major projects that it commissioned from senior infrastructure delivery adviser James Stewart last year.
She is also backing the re-set of the project that is being implemented by Mark Wild, the new HS2 chief executive, now assisted by former Trasport for London commissioner Mike Brown, who has been appointed chair of HS2 Ltd. Wild and Brown both worked together on the Crossrail project and are now being relied on to get HS2 over the line.
Alexander told the House of Commons: 鈥淢ark Wild鈥檚 initial assessment lays bare the shocking mismanagement of the project. He said the overall project with respect to cost, schedule and scope is unsustainable. Based on his advice I see no route by which trains can be running by 2033 as planned. He reveals costs will continue to increase if not taken in hand, further outstripping the budget set by the previous government and he cannot be certain that all cost pressure have yet been identified.鈥�
She said that she would not be able say what the project would now cost until Wild has completed his investigations. That is likely to be towards the end of the year.
But she was critical of the failings exposed in the Stewart report. Projected costs soared by 拢37bn under the previous Conservative government, she said, and 拢2bn was sunk into phase two before it was cancelled.
Other examples of mismanagement and incompetence cited by Alexander include HS2 Ltd鈥檚 management of planning Euston terminus. 鈥淏etween 2019 and 2023 HS2 Ltd provided initial designs for Euston station, coming in almost 拢2bn over budget,鈥� she said. 鈥淲hen asked for a more affordable option, they offered one costing 拢400m more than the first attempt. The word affordable was clearly not part of the HS2 lexicon.鈥�
She added: 鈥淭he combined cost for these two failed designs, which has now been written off, was more than a quarter of a billion pounds.鈥�
Ministers were also asleep at the wheel. In response to the Euston chaos, the previous government announced a Euston ministerial taskforce. 鈥淯nbelievably, the taskforce never met,鈥� Alexander said.
As well as getting more ministerial attention, HS2 is changing its approach to estimating costs, working with suppliers so that their contracts incentives saving costs for taxpayers.
The priority will be keeping a check on costs rather than hitting a completion deadline, she said.
鈥淏oth capability and cultural issues within HS2 must be addressed,鈥� the secretary of state said, and Mark Wild is doing that.
鈥淚t is an appalling mess but one we will sort out,鈥� she said.
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