Bechtel removes legal block to allow HS2 to sign £1.3bn contract

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The Old Oak Common station contract is worth £1.3bn
The Old Oak Common station contract is worth £1.3bn

American engineering giant Bechtel has withdrawn its legal bid to prevent HS2 signing a contract for one of its key London stations.

HS2 has been unable to sign a £1.3bn contract for Old Oak Common station with Balfour Beatty, Vinci Construction and Systra ever since rival bidder Bechtel launched a legal challenge over the entire procurement process.

Read more: Government ‘knew for years’ that HS2 would blow its budget

The legal claim, lodged in February, resulted in an automatic suspension order that prevented HS2 from physically signing the contract.

Last month HS2 applied to lift the suspension. Bechtel has now decided it will not contest that move.

Morning Wire understands that a key factor in Bechtel’s decision was the fear that it would be liable to pay the costs of any further delay to the station programme, which are thought to be in excess of £100m.

Bechtel will still pursue its legal claim against HS2’s handling of the contract procurement process at full trial next year.

A Bechtel spokesperson said: “We remain confident of our case and are still pursuing it through to trial next year.”

An HS2 Ltd spokesperson said: “We welcome Bechtel’s decision. The arrival of HS2 will transform Old Oak Common and help deliver 25,000 new homes and 65,000 jobs, as part of the UK’s biggest regeneration project. Our early works contractors are currently hard at work, clearing the huge site and preparing for the start of station construction.

“We remain confident that the construction partner procurement process was robust, and we intend to sign contracts as soon as possible.”

Question marks linger over whether HS2, the high speed line that will link London to the north in stages, will even be be built following Boris Johnson’s decision to hold a review into the whole project.

Read more: HS2 locks horns with Bechtel in bid to break contract stalemate

The review was called amid concerns that the cost of the project has ballooned to more than £100bn. Its official price tag is £56bn.

The review, which will be led by former HS2 chair Douglas Oakervee and prominent HS2 critic Lord Berkeley, is due to finish in the autumn.