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June 22, 2021

HS2 costs surge by £1.7bn during pandemic stoking controversy further

Reduced productivity and delays caused by Covid have increased both the HS2 budget and the controversy surrounding it.

By Market Line

The biggest infrastructure project in the UK has seen costs surge by a further £1.7bn ($2.1bn) since the pandemic began. Covid related delays and reduced productivity have increased costs.

These cost rises add to the already insurmountable controversy surrounding the high-speed rail development.

Pandemic sends costs soaring

HS2, the UK’s biggest and most controversial infrastructure project, has added a further £1.7bn ($2.1bn) in costs during the pandemic. This adds to the already inflated budget of approximately £106bn ($135bn).

As the pandemic hit back in March 2020, work was temporarily suspended at most of the project’s sites. Added to this, social distancing measures have caused further delays and a reduction in productivity. This has led to spiralling costs.

While cost increases have been estimated at £1.7bn ($2.1bn), a contractor close to the project has reportedly stated that the exact amount Covid has added still remains unknown.

Increased costs add to the already intense controversy surrounding HS2

Even before construction began on HS2, it attracted a huge amount of controversy and criticism. Aside from the environmental concerns that have been raised, the cost of the project has particularly come under the spotlight.

HS2 was originally priced at £32.7bn ($41.9bn), but in 2013 this estimate was revised up for the first time by £10bn ($12.8bn). At the time, the Department for Transport stated that it would not necessarily need to use all of the £42.7bn ($54.7bn) budget.

Since then, costs have steadily risen. A government-commissioned review in 2019 estimated that the final outlay for HS2 could reach a staggering £106bn, over three times the original budget.

With the recent revelation that pandemic related costs have added a further £1.7bn, it remains to be seen how high the true cost of HS2 will reach.

Pandemic has undermined the necessity for a high-speed rail network

While the pandemic has sent costs soaring, it has also reduced the need for a high-speed rail network. Covid has changed the way people work, with remote working becoming the new normal.

The effectiveness of carrying out meetings via platforms such as Zoom has reduced the need to travel for face-to-face meetings.

While supporters of HS2 have heralded the link it will create between the North and the South, the pandemic has essentially rendered this irrelevant.

As costs continue to mount, controversy surrounding HS2 will only mount further in post-pandemic times.

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