HS2 ‘will finish at Euston’ – but it’ll cost taxpayers another billion
The UK government will give HS2 the go-ahead for a 4.5 mile tunnel under Central London within weeks, with the embattled project funded by taxpayer cash, it has been reported.
Whitehall is expected to release over £1bn in taxpayer subsidy for the work, according to multiple sources cited by the Financial Times.
It means HS2 will eventually terminate at its long-delayed Euston terminus, as opposed to Old Oak Common in the outer suburbs.
But the use of taxpayer money would contradict a pledge by Prime Minister Rishi Sunak to bring in private developers to fund the project.
Sunak announced proposals to save around £6.5bn from the Euston station development in October by creating a public-private partnership, shortly after the Manchester leg of HS2 was axed.
The move formed part of a bid by government to ease pressure following the controversial decision, which came after costs at HS2 spiralled out of control in recent years.
In October, the UK prime minister announced a plan to save £6.5bn from the redevelopment of the Euston terminus and tunnel link by handing responsibility to a new public-private development corporation.
The government will give final approval for work to begin tunnelling the final 4.5 miles from Old Oak Common to Euston, the Financial Times reported. Taxpayers will fund the cost upfront, which amounts to over £1bn after the plan was signed off by ministers, it added.
The feasibility of Whitehall’s private funding proposals for Euston had raised eyebrows among many top level industry figures.
Mark Reynolds, chief executive of HS2 Euston’s key contractor Mace, previously told City PM in an interview that the plans had “gone into a black hole,” with the government ignoring their advice on how it might be done.
Sir John Armitt, chair of the National Infrastructure Commission, warned in November the plans would likely fail. “At the end of the day the government will need to be ready to fund the core civil engineering for the final miles of the project,” he said at the time.
And London Mayor Sadiq Khan also poured cold water on the idea, stating last year there was “not a cat in hell’s chance” private investors would back the 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.”
In a statement, the Department for Transport (DfT) insisted it remained “committed to delivering a privately financed Euston station as previously set out, helping to deliver value for money for taxpayers.
“It is one of the largest regeneration opportunities in central London and there is already extensive support and interest from the private sector to invest – and we will set out full details in due course.”