INSIGHT | FINANCE, RISK, PROCUREMENT
HOPES, PLANS AND CHALLENGES ONGOING
Time and cost are the focus on recent reviews and discussions on planning and executing HS2 and Sizewell C projects. Report by Patrick Reynolds.
HS2’s Northolt Tunnel.
Recent report from the government and the National Audit Office (NAO) have looked at two major infrastructure projects with underground elements of different degree: High Speed Two rail project (HS2) and Sizewell C nuclear power plant, respectively. What the large construction schemes have in common is the concern among many over cost and completion timelines. HS2 may be far more advanced but is very late and well
over budget already, and in the midst of a consequential reset; Sizewell C is in relatively early stages but draws upon experience of a prior major nuclear power plant project in the UK. As such, HS2 flagged its reset needs and agenda last
year and work has been underway on the task since then, and was recently updated by government. The NAO have looked over the project and reset, too, and at the end of June shared its views. Both reviews on HS2 project are discussed below. NAO also conveyed its cautionary advice on Sizewell C’s “novel finance structure” in the previous month, May, and the key points are also discussed below.
HS2 The NAO comments, in its report on HS2 out at the end of June, that the cost of Phase 1 of the large-scale rail project
30 | July 2026
“increased significantly” since 2020, doubling in effect to somewhere in the range of £87.7 billion to £102.7 billion. Those are the same figures released the month before,
by the Department for Transport (DfT), when Transport Secretary Heidi Alexander briefed Parliament on the latest cost estimates. She added that one third of the total budget increase in the project is due to inflation, while the balance - the majority - is due to works missed from the original project scope and delivery inefficiencies. Given the range of the cost estimates, decimal accuracy
might not be the key factor to follow to get a sense of the jump in cost and to the level where it is expected to sit. Broadly, the range can be taken to be from near £90 billion to slightly more than £100 billion. Bottom line, there is little change to be left from £100 billion, relatively. And, in return for that outlay the project is anticipated
now to open about 13 years late - or at least later than that planned for erroneously in weak evaluations at the outset, when there was a rush to get going. It is now known that the best of preparations and oversight were not performed, according to what the official assessments have found. Yet there have been excellent engineering achievements, above and below ground, and while most tunnelling has been completed the final main works are
All Images courtesy of HS2 Ltd
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