Ministers have delayed signing off on the first half of spending for the High Speed 2 railway, it has emerged, as negotiations continue with the project’s contractors.
A formal "notice to proceed" for the first phase of the high-speed railway has now been pushed back six months until December, The Telegraph has reported.
The notice would have released £27bn of funding to build the stretch of the line between London and Birmingham. Without it, HS2 Ltd, the company that has been set up to build the line, cannot sign the contracts needed to begin major construction works.
The go-ahead for the project had initially been scheduled for last month, but was pushed back to June due to cost pressures. HS2 Ltd’s chief executive Mark Thurston – who replaced Sir Terry Morgan when he quit in December – said in November the company was negotiating with its suppliers and partners to “get to a point where we have an affordable scheme to be able to build [the railway]”.
Work on the phase 2 of the project, extending the line from Birmingham to Leeds and Manchester, has not yet been approved by parliament and is not due to begin until 2024.
The Telegraph quoted a Whitehall source saying that transport secretary Chris Grayling had made it “clear” HS2 must control its rising costs.
A spokesperson for HS2 said the company was continuing to negotiate with its main contractors and would move to the notice to proceed when these are concluded “later this year”.
“HS2 already supports more than 7,000 jobs both directly and across our UK-wide supply chain. Work has been carried out on more than 60 sites including major works ongoing at [the railway stations] Euston, Old Oak Common and Curzon Street in Birmingham.”
Work has started on the first phase of the project, including demolition of existing buildings and archaeological digs.
But the delays could mean the project is at risk of being cancelled if either the government or the Conservative Party leader changes. A number of senior Conservative politicians have expressed concerns about the estimated £56bn cost of the project, including prospective Tory leadership contenders Boris Johnson and Esther McVey.
A DfT spokesperson said: “HS2 is happening. The project is already underway with more than 7,000 people and 2,000 businesses working on building what will become the backbone of Britain’s rail network.
“As taxpayers would expect, we constantly assess the best ways to deliver value for public money and ensure we realise the full benefits of HS2.”