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Winners of £6.6bn construction contracts for HS2 Phase One announced

The winners of the major construction contracts for Britain’s new railway were announced today (17 July 2017), with the £6.6 billion contracts supporting 16,000 jobs across the country.

16,000 jobs will be supported through contract opportunities over the next 6 years.

The huge infrastructure investment covers the main civil engineering work on the first phase of HS2 between London and Birmingham – including construction of tunnels, bridges, embankments and viaducts.

Transport Secretary Chris Grayling announced the decision to award contracts today, which will mean the new high speed link reaching Birmingham by 2026.

Transport Secretary Chris Grayling said “This is a hugely important step in the construction of Britain’s new railway and underlines this government’s determination to deliver an economy that works for all.

“HS2 will deliver vital links between some of our country’s biggest cities, helping to drive economic growth and productivity in the north and midlands.

“As well as providing desperately needed new seats and better connecting our major cities, HS2 will help rebalance our economy.

“We will now get on with building the railway, while continuing to ensure affected communities get appropriate support and are treated with fairness, compassion and respect.”

David Higgins, Chairman of HS2 Ltd, added “This is a huge day for the HS2 project and for the country. These contracts will support 16,000 jobs here in Britain and will create opportunities for thousands of SMEs.

“HS2 was always designed to be much more than just a high speed railway and today we can see the opportunities it brings right around the country – spreading prosperity, acting as a catalyst for investment and rebalancing our economy 10 years before the railway even opens. Business now has the surety to invest with confidence to build a legacy for Britain.”

HS2 could carry more than 300,000 people a day. And with fast trains using the new line, there will be extra space for more trains on the existing rail network.

Benefits will be felt across the network with trains running as far as Scotland and the number of seats available out of Euston in peak hours more than doubled.

In total, construction of the full HS2 route to the north-west and Yorkshire will create up to 25,000 jobs and 2,000 apprenticeships. Another 3,000 people will operate HS2 and it is estimated that growth around new HS2 stations will create another 100,000 jobs.

2,000 apprenticeships will be created.

In February, Parliament granted powers to construct the Phase One route from London Euston to Birmingham, with the route opening in 2026.

The winning bidders to build the first phase of the route are:

Area South

Euston Tunnels and Approaches – SCS JV (Skanska Construction UK Ltd, Costain Ltd, STRABAG AG)
Northolt Tunnels – SCS JV (Skanska Construction UK Ltd, Costain Ltd, STRABAG AG)

Area Central

Chiltern Tunnels and Colne Valley Viaduct – Align JV (Bouygues Travaux Publics, VolkerFitzpatrick, Sir Robert McAlpine)
North Portal Chiltern Tunnels to Brackley – CEK JV (Carillion Construction Ltd, Eiffage Genie Civil SA, Kier Infrastructure and Overseas Ltd)
Brackley to South Portal of Long Itchington Wood Green Tunnel – CEK JV (Carillion Construction Ltd, Eiffage Genie Civil SA, Kier Infrastructure and Overseas Ltd)

Area North

Long Itchington Wood Green Tunnel to Delta Junction and Birmingham Spur – BBV JV (Balfour Beatty Group Ltd, VINCI Construction Grands Projets, VINCI Construction UK Ltd, VINCI Construction Terrassement)
Delta Junction to WCML Tie-In – BBV JV (Balfour Beatty Group Ltd, VINCI Construction Grands Projets, VINCI Construction UK Ltd, VINCI Construction Terrassement)
Preparatory works are already underway, with main construction work starting in 2018/19 following a period of detailed design work.

In addition, HS2 stations at Euston, Old Oak Common and in Birmingham will be central to HS2 and the work needed to develop designs is also well underway. Both the invitations to tender (ITTs) for the station design services contracts for all 4 Phase One stations and the invitation to participate in dialogue (ITPD) for the Euston Master Development Partner have been released to shortlisted bidders.

These are significant milestones which show how progress is continuing to deliver stations that will be embraced by the local communities, drive economic growth and provide seamless journeys for passengers.

The Transport Secretary will today publish a Bill to deliver the next phase of HS2, from the West Midlands to the West Coast Main Line south of Crewe.

This means – subject to Parliamentary approval – this part of the route can open in 2027, 6 years earlier than planned, to bring the benefits of HS2 to the north and Scotland sooner.

The Transport Secretary will also confirm the final Phase 2b route, from Crewe to Manchester and Birmingham to the East Midlands and Leeds. This phase will complete HS2 and unlock the transformative project’s full benefits for the country.

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Architects wanted for iconic HS2 station designs

The search for world-class architects, designers and developers to deliver four ambitious and iconic new HS2 stations has begun with the publication of contract opportunities for station designs and a development partner for London Euston.

The winning bidders will work with High Speed Two (HS2) Ltd to develop and refine the detailed plans for three brand new stations, at Birmingham Curzon Street, Birmingham Interchange and London’s Old Oak Common, as well as a major expansion of London Euston.

The stations will welcome tens of thousands of passengers every day from all over the UK, providing easy and accessible onward connections to local transport, airports and connecting rail services as well as step-free access from street to seat. In total more than 170,000 new jobs are expected to be created in the wider development areas surrounding the four stations.

A separate contest, will seek a Master Development Partner to advise on, and later take forward, development opportunities for new homes, offices and retail space above and around the revamped London Euston. The winner will work with HS2 Ltd, Network Rail, the station design contract winner and local authorities to deliver a unified plan to unlock the full potential of the area.

This comprehensive approach has the potential to deliver up to 21 hectares of development space as well as improving accessibility and creating new public and green spaces across the wider Euston site.

Welcoming the launch of the competition, Transport Minister Andrew Jones said “The search for design teams to produce plans for new stations and world-class amenities for London Euston, Old Oak Common, Birmingham Interchange and Birmingham Curzon Street stations is a major step towards making HS2 a catalyst for growth across the country. The winning bidders will need to ensure the stations provide the best possible customer experience. There are also huge opportunities for development near all the HS2 stations. HS2 Ltd is progressing its search for a partner to deliver new homes, shops and offices around Euston station once the core HS2 work is complete.

HS2 Ltd Commercial Director Beth West added “We’re looking for the brightest and the best from across the industry to help us deliver one of the most tangible legacies of the HS2 project – three brand new stations and a major expansion of London Euston.

“All four present unique challenges and opportunities for the winning bidders. Together we will deliver world-class designs that help unlock wider local regeneration opportunities and provide unparalleled levels of accessibility, ease and convenience for the travelling public.”

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Government’s rail improvements tops list of infrastructure-driven property development opportunities

  • 86% of UK property developers say investors are increasingly looking to capitalise on government’s £23 billion infrastructure spend
  • Rail, tram and underground schemes will provide the most attractive opportunities led by Crossrail and Crossrail 2
  • Amicus Property Finance has provided more than £1 billion of short term property loans

Nearly two-thirds (63%) of property investors rated new and upgraded rail and tram links as providing the most attractive real estate development opportunities from the government’s £23 billion infrastructure scheme over the next five years, according to a new study1 commissioned by Amicus Property Finance, the specialist short term property lender.

Improved road transport links (55%), local authority-sponsored urban regeneration schemes (48%) and airport upgrades (43%) were ranked second, third and fourth respectively among property investors in terms of the potential offered by developing adjacent sites.

Analysis of the government-backed projects on an individual basis shows that three-quarters (77%) of property developers ranked Crossrail and Crossrail 2 as offering the most potential for residential schemes, ahead of High Speed 2 (51%), Thameslink (47%) and superfast broadband (14%).2

According to the study, an overwhelming majority (86%) of UK property developers believe that their peers are increasingly looking to capitalise on opportunities generated by the new £23 billion government-backed infrastructure programme over the next five years.

Keith Aldridge, Founder & Managing Director at Amicus Property Finance, said “The government’s decision to invest in building new infrastructure and upgrading existing assets provides a tremendous opportunity for residential and commercial property developers and we can expect this to continue for many years to come.

“The longer term impact of this infrastructure programme on regenerating existing residential communities and creating new ones cannot be underestimated, particularly when combined with the government’s renewed commitment to addressing the country’s housing gap. We have already seen growing demand among developers seeking short term finance to fund infrastructure-related residential and commercial schemes.”

Amicus Property Finance’s research also revealed that Crossrail and Crossrail 2 as the highest ranked government infrastructure schemes for commercial property development (71%) followed by High Speed 2 (51%), Thameslink (47%) and Manchester Airport (24%).

Amicus Property Finance, part of Amicus Finance plc, the leading specialist financial services group, has seen a strong start to 2017 having provided more than £1 billion of short term property loans last year as it further expanded its customer base among brokers, professional landlords and developers seeking finance for residential and commercial real estate assets.

As part of its growth journey, Amicus Finance plc, which expects to receive its banking licence this year, opened an office in Manchester last year to significantly expand its presence across the North. The new Manchester office provides a regional hub for SME lending, working capital solutions and short term property loans.

Amicus has seen consistently strong funding from the Omni Secured Lending (OSL) Funds. Vintages I, II and III have provided more than £500m of institutional third-party funding to the business. During January and February 2017 alone Vintage III raised more than £200m of new institutional capital, which is being actively deployed to fund new lending activity.

From the list below of the ten largest government-backed infrastructure projects in the UK, which you believe will create the best property development and investment opportunities?
  The best residential property development and investment opportunities (%) The best commercial property development and investment opportunities (%)
Crossrail and Crossrail 2 (South East England, £16.8 billion investment) 77% 71%
High Speed 2 (London, Birmingham, the East Midlands, Leeds, Sheffield and Manchester, £2.75 billion investment) 59% 51%
Thameslink – Network Rail (South East England, £6 billion investment) 47% 47%
Superfast broadband rollout (Nationwide, £1 billion investment) 14% 10%
Manchester Airport Investment (Greater Manchester, £1 billion investment) 10% 24%
M1 improvements (Chesterfield to Leeds, £1.3 billion investment) 10% 10%
M42 improvements (The Midlands, £1.8 billion investment) 10% 10%
River Forth replacement crossing (Edinburgh to Fife, £1.3 billion investment) 4% 4%
Hinkley Point C (Somerset, Chinese investment of £6 billion investment) 4% 10%
Smart Meters implementation programme (Nationwide, £11 billion investment) 0% 4%

Amicus Property Finance’s property loan portfolio is currently made up of 85% residential properties and 15% commercial properties, with 70% located in London or the South East. Its loans are repaid, on average, in eight months and it typically lends between £50,000 and £7 million.

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VIDEO: Crossrail’s quarterly update

Crossrail have released the latest video in their “Moving Ahead” series, which is issued four times a year to inform of how much progress has so far been made on what has been described as Europe’s largest construction project.

Construction work on Crossrail began in May 2009. Once completed, the Crossrail route will run over 100km from Reading and Heathrow in the west, through new tunnels under central London to Shenfield and Abbey Wood in the east.

Crossrail is considered to be among the most significant infrastructure projects ever undertaken in the UK. From improving journey times across London, to easing congestion and offering better connections, Crossrail say that their project will change the way people travel around the capital.

The total funding envelope made available to deliver Crossrail was a staggering £14.8bn, however, the new railway is expected support regeneration across the capital and add an estimated £42bn to the economy of the UK.

Watch the latest update below:

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Only 15% think HS2 is worth the money

Following the news that the first major works contracts for High Speed 2 worth around £900m have been awarded to three consortia*, a survey conducted by the ITV Tonight programme into issues surrounding HS2 has found:

  • Only 15% feel that HS2 is worth £56bn
  • 58% don’t think it’s a price worth paying
  • 77% of people would prefer that the money was spent in other areas, like the NHS
  • Nearly three-quarters of people thought HS2 would lead to price rises for train tickets
  • 60% said they would not pay more to ride on HS2
  • 7% would be prepared to pay increased prices for the high speed line
  • 80% said they felt sympathy for people who may lose their homes to HS2, even though they may be compensated
  • 11% people thought the high speed rail link would benefit the majority of commuters
  • 23% are not aware that HS2 is being planned

Additionally, less than 20% of respondents thought they would use HS2 when built, and only a third of people feeling that HS2 will benefit the north.

Joe Rukin, Stop HS2 Campaign Manager responded “After six and a half years of trying to con people into thinking HS2 is a good idea, public support for this white elephant is at an all-time low. It’s clear the spin from Government isn’t working as not only do only 15% think it’ll be worth the money, they’ve also seen through the spin, with the vast majority thinking it won’t benefit commuters, it won’t benefit the north and it will lead to an increase in the cost of train tickets. Quite simply, no-one is buying the hype and it is time to cancel HS2 before it is too late.”

Penny Gaines, chair of Stop HS2 added “We have yet another survey that shows the British people don’t think HS2 is worth the £56 billion pound price tag. This is the same message as from numerous other surveys. People can see the downsides, they won’t use HS2 and they are worried that HS2 will mean increased fare prices on the trains they do use. With the Government’s intention that whoever gets the West Coast Main Line franchise will also run HS2 for the first few years, it is even more likely that conventional speed fares will go up.”

*North: LM JV (Laing O’Rourke Construction, J Murphy & Sons)
South: CS JV (Costain, Skanska Construction UK )
Central: Fusion JV (Morgan Sindall, BAM Nuttall, Ferrovial Agroman (UK)

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HS2 CEO Simon Kirby steps down from role

The CEO of HS2 project, Simon Kirby is leaving HS2 for a new job with Rolls-Royce as chief operating officer.

Kirby was announced as CEO of HS2 Ltd in January 2014, but controversially did not join HS2 Ltd until June 2014, meaning he could cash in on a £300,000 ‘loyalty bonus’ from Network Rail. Not long after he and Chairman Sir David Higgins joined from Network Rail, it became evident that many of the projects they had been responsible were over budget and behind schedule, leading to then Transport Secretary Patrick McLoughlin ‘pausing’ electrification projects pending review.

On joining HS2 Ltd, Kirby became the highest paid civil servant in the country, earning £750,000, five times the salary of the Prime Minister. he justified this saying he could get the project in on time and budget, but since then both the budget and the timescales have gone the wrong way.

Simon Kirby made it clear that he is not leaving due to a loss of confidence in the project, saying in a statement on the government website: “HS2 is not just a highly ambitious project, but also one which will leave a lasting legacy for Britain. It has been, therefore, a huge honour to have been its Chief Executive and to have been involved in creating a leadership team made up of the best talents from this country and elsewhere. I have absolute confidence in their ability to deliver the project and, in doing so, to help transform the way we do things in this country.”

This is being refuted by many, with Stop HS2 Campaign Manager Joe Rukin commenting “When Simon Kirby was at Network Rail, he presided over failing projects with inflating costs and delays, but got out before anyone noticed how bad it really was. With HS2 deadlines constantly put back, spiralling costs, secret reports and devastating analyses of the project from every independent body which has investigated it, you can’t help think he is doing the same thing again, getting out before the true scale of the mess he has presided over is realised.”

“The departure of Simon Kirby will be a serious blow to those who champion HS2, though many of us are at a complete loss to see just exactly what it is he has done to justify his three-quarter of a million pay packet.”

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HS2 will still go ahead, pledges new transport secretary

The new Secretary of State for transport, pledged to continue backing HS2, following uncertainty around the project post-Brexit.

On a BBC Radio 4 interview, Chris Grayling promised not to scrap plans for high speed 2, despite suggestions having been made that HS2 is under threat of being cancelled by David Cameron and industry experts. Grayling said “I have no plans to back away from the HS2 project.”

Before the Referendum, in June, Prime Minister David Cameron addressed Yorkshire residents at the Yorkshire Post’s offices in Leeds, and warned of uncertainty for the project if Britain left the EU.

“If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme,” he said.

“If we come out, of course I’m sure we will want to try and maintain these important investments. But when you hear nine out of ten economists, the Bank of England, the Treasury, the IMF and now the National Institute [of Economic and Social Research] all saying our economy will be smaller and will generate less tax revenue, obviously that does threaten potentially some public spending programmes.”

In the interview, which took place on the BBC radio program “The World This Weekend”, the Transport Secretary explained that the importance of HS2 is two-fold; not only will it speed up transport links between the North and South, but it will also help meet an increasing infrastructural demand and ease congestion on overcrowded roads and trains.

Grayling said: “The thing that’s important for people to understand is that HS2 is not simply a speed project, it’s a capacity project. We have lines at the moment which have seen huge increases in the number of passengers, the amount of freight in recent years.”

“The west coast mainline, for example, is becoming really congested. It’s limiting the capacity of services to places like Northampton and Milton Keynes.

“Of course it makes sense, if we’re going to build a new railway line, for it to be a fast railway line, to reduce travel times from north to south. That’s logical.

“But actually we need a better transport system for the 21st century, and HS2 is part of increasing the capacity of our transport system.”

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