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An architect’s impression of the planned HS2 viaduct at Birmingham and Fazeley.
An architect’s impression of the planned HS2 viaduct at Birmingham and Fazeley. Photograph: HS2/PA
An architect’s impression of the planned HS2 viaduct at Birmingham and Fazeley. Photograph: HS2/PA

HS2 contracts worth £6.6bn awarded by UK government

This article is more than 6 years old

Contracts announced as transport secretary prepares to unveil changes to final Manchester and Leeds routes

The government has awarded £6.6bn in contracts to build the new high-speed HS2 railway between London and Birmingham, to companies including crisis-ridden construction firm Carillion.

Construction work is due to begin next year on new stations, tunnels, embankments and viaducts on the London to Birmingham line, which forms the first phase of the controversial HS2 project. The civil engineering alone is expected to create 16,000 jobs.

The TUC welcomed the contract awards as a “shot in the arm for Brexit Britain”. The union’s deputy general secretary, Paul Nowak, said: “It will provide thousands of decent jobs, billions in investment, and help close the north-south divide. HS2 is a real opportunity for British steel to shine. The next phase of HS2 should bring jobs and investment to the parts of Britain that need them most.”

The TUC has signed a framework agreement to guarantee high employment standards and to “maximise the potential benefits of HS2 to the UK supply chain”.

Chris Grayling, the transport secretary, also published a bill to prioritise phase 2a of HS2, which involves speeding up construction work between Birmingham and Crewe, and confirmed the precise route for phase2b, which will run north via Manchester and Leeds.

HS2 northern routes

In the wake of fresh claims that the HS2 scheme could be beset by escalating costs, Grayling told the BBC that HS2 would be “on time, on budget” and insisted the government had “a clear idea of what it will cost”. Opponents have warned that the government is underestimating the costs, and that construction has already been delayed. The overall budget was revised up to £55.7bn, but estimates drawn up on behalf of Lord Berkeley, chairman of the Rail Freight Group, suggested it could be as high as £111bn. Grayling dismissed the figure as “nonsense”.

Asked about the decision to spend on infrastructure while there is a 1% cap on public sector pay, Grayling said: “That’s a very different issue because we are talking about capital investment over the next 15 years. We are not talking about current spending that the chancellor will decide on come the budget.”

Carillion’s joint venture with French construction company Eiffage and UK firm Kier has won two contracts worth £1.4bn to design and build the North Portal Chiltern tunnels to Brackley and the Brackley to Long Itchington Wood Green tunnel South Portal.

The troubled construction company’s share price crashed 70% last week after it issued a profit warning and announced the departure of its chief executive. However, Carillion shares were up more than 19% on Monday after the HS2 contract win. The firm announced it had appointed accountancy firm EY to support a strategic review of the business.

HS2 route map

City analysts said the win was “encouraging” for Carillion’s shareholders, but remained sceptical about the firm’s outlook. Neil Wilson of ETX capital said: “Whether it can deliver these contracts is another matter. It could make it a slightly more attractive prospect to rescue if it comes to that.”

Balfour Beatty’s joint venture with French firm Vinci has won two contracts worth £2.5bn. They will design and build the Long Itchington Wood Green tunnel to the Delta Junction/Birmingham Spur and the section from the Delta Junction to the west coast main line near Lichfield in Staffordshire. Vinci has been involved in the high-speed Tours-Bordeaux rail project in France.

The Balfour Beatty chief executive, Leo Quinn, described HS2 as a “generational engineering project”.

A joint venture between Sweden-based Skanska, Austria’s Strabag and UK firm Costain, which has worked on Crossrail and the Channel tunnel, won contracts worth nearly £2bn.

Other companies to have won HS2 work are French construction group Bouygues and UK firms Sir Robert McAlpine and VolkerFitzpatrick. Their venture was awarded a £965m contract.

The RMT union demanded the government ensure proper employment on all the contracts, noting that several of the firms had been involved in the blacklisting scandal settled last year.

Aslef’s Mick Whelan called for a government pledge not to sell off HS2, after Britain’s only current high-speed track, HS1, was sold on last week by pension funds who were awarded the concession. Whelan said HS2 was being paid for by the taxpayer and should “not be asset stripped by any government for the benefit of privateers”.

The first trains are due to run between London and Birmingham in 2026, with the full Y-shaped network expected to be in operation by 2033.

HS2 phase 1 construction contracts

Area South

S1: Euston tunnels and approaches – SCS JV (Skanska Construction UK, Costain, Strabag)

S2: Northolt tunnels – SCS JV (Skanska Construction UK, Costain, Strabag)

Area Central

C1: Chiltern tunnels and Colne Valley viaduct – Align JV (Bouygues Travaux Publics, VolkerFitzpatrick, Sir Robert McAlpine)

C2: North Portal Chiltern tunnels to Brackley – CEK JV (Carillion Construction, Eiffage Génie Civil, Kier Infrastructure and Overseas)

C3: Brackley to South Portal of Long Itchington Wood Green tunnel – CEK JV (Carillion Construction, Eiffage Génie Civil, Kier Infrastructure and Overseas)

Area North

N1: Long Itchington Wood Green tunnel to Delta Junction and Birmingham Spur – BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement)

N2: Delta Junction to WCML Tie-In – BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement)

More on this story

More on this story

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  • Prince Charles is called to public debate by designer Richard Rogers

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  • Carillion boss steps down as shares crash 40%

  • People on estate facing demolition for HS2 could struggle to find new homes

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