The government must get a grip on HS2 Euston’s private funding debacle
The chief executive of Mace Group, the construction firm contracted to deliver HS2’s Euston station, warned yesterday that the government is ignoring advice on how to drum up private sector funding to see the project through.
The project has largely been disastrous, with costs soaring to more than £100bn, from an initial budget of around £33bn, and construction significantly delayed – the reasons why the project’s northern leg was ultimately axed.
But there is a chance to salvage some success if the government can secure construction of the Euston terminus.
If no money is found, the line will run between Birmingham and west London’s Old Oak Common instead, stripping it of much of its value.
But the likelihood of private investment is looking slimmer as each day passes.
A string of senior politicians and infrastructure officials have poured cold water on the government’s ambitions in recent weeks.
Despite what Mark Harper and the Department for Transport (DfT) might claim, warnings in November from the government’s top infrastructure adviser, Sir John Armitt, that private developers would not fund the 4.5-mile tunnel needed for Euston, leave hope hanging by a thread.
At a London assembly meeting that same month, London Mayor Sadiq Khan said there was “not a cat in hell’s chance” private investors would back the Euston project.
“The idea that the private sector is going to put billions into a project, not knowing what is round the corner, what other U-turns might come, is not realistic,” he said.
The government needs to get its act together.
As Mace’s boss rightly said, private investors need certainty above all else. It is only with certainty that the engine of productivity can roar into action.
The government’s inability to get basic communication with its chief contractors right on this one is hardly a step towards certainty.