The Conservatives are eyeing savings of £30 billion-plus in HS2 by scrapping the northern leg of Britain’s landmark high-speed rail project, according to media speculation.
Prime minister Rishi Sunak has refused to confirm or deny the rumours, stating in floaty terms that "we're absolutely committed to levelling up and spreading opportunity around the country”.
A decision on the matter will reportedly be made prior to Sunday’s Conservative Party conference in Manchester.
A fitting locale, given the vast repercussions that scrapping HS2’s northern leg would have on the Mancunian capital.
Breaking down HS2
The HS2 construction roadmap is split into three core phases- Phase 1, Phase 2a and Phase 2b.
Phase 1 will connect London to Birmingham, Phase 2a will connect Birmingham to Crewe, and Phase 2b will connect Crewe to Manchester. There is also an auxiliary HS2 East line connecting Birmingham to the East Midlands.
At least, that is the plan.
Delays are to be expected on any construction project of this scope, and HS2 is no different.
The London-to-Birmingham line opening has already been pushed back four years to 2033, while work on the London Euston station has been delayed too.
In July, The Infrastructure and Projects Authority warned that the entire project “appears to be unachievable”.
“There are major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable. The project may need re-scoping and/or its overall viability reassessed," the IPA stated.
While delays may be inevitable, the Manchester link is now at risk of being scrapped for good.
Doing so would rip the heart out of northern powerhouse rail, Manchester mayor Andy Burnham told the BBC Radio 4’s Today programme.
“And that will be a disaster for people here in the north of England. It would leave us stuck with that Victorian infrastructure that causes so much chaos on our railways day after day,” said Burnham.
Businesses, too, risk losing out.
Who are the stakeholders?
Nearly 3,000 businesses have delivered work on HS2 so far, with major construction firms like Balfour Beatty and Skanska working alongside British SMEs up and down the country.
One of the largest direct contracts in Phase 2, worth up to £500 million, was awarded to engineering firms Mott MacDonald, WSP, AECOM, Capita Property and a number of others.
There are still billions in contract awards yet to be handed out.
One Phase 2 contract, for the “provision of the main civils works”, is valued at anywhere between £500 million and £3 billion.
Kier Construction has a contract worth between £50 million and £100 million for the “delivery of major highways works and associated utility diversions, plus environmental and other surveys along the 36-mile route”.
Balfour Beatty also has a number of multimillion-pound Phase 2 awards under its belt.
It is unclear what will happen to these awards should Phase 2 be scrapped, though the inevitable result will be years of prolonged litigation as parties pore over their termination clauses.
Alongside these big-ticket direct contracts are hundreds of smaller-value indirect contracts, ranging from cleaning services and catering to plant and machinery hire.
These indirect contracts are awarded through a two-tier system.
Tier-one contractors Balfour Beatty, Align (a joint venture between Bouygues, VolkerFitzpatrick and Sir Robert McAlpine), EKFB (a joint venture between Eiffage, Kier, Ferrovial Construction and BAM Nuttall) and Skanska dish out these indirect awards to smaller subcontractors, typically regional SMEs.
These SMEs will undoubtedly feel the greatest impact of HS2’s northern leg being scrapped.