High Speed Two (HS2) Limited
Major engineering projects such as HS2 are a learning curve in which the method of construction as well as cost control evolve as they reach a more mature and detailed design stage which incorporates the lessons learned from other projects both here and abroad.
As the report reflects, this is the process HS2 is currently going through but it is that which gives it the confidence that it can match both its ambitious strategic objectives and the budget for Phases One and Two.
At each stage the combination of value engineering (identifying the most cost effective way to deliver individual elements such as viaducts), plus the lessons we have taken from international best practice and innovation is helping HS2 both to drive down cost and increase our confidence in our ability to deliver, and that is a process that will continue.
That increasing confidence allowed the project earlier this month to invite the industry to bid for around 11bn worth of contracts for Phase One.
As the report acknowledges, each of those contracts also contain specific incentives for partners to work with HS2 to keep identifying further ways in which costs can be saved and efficiencies realised, without compromising the strategic scope and objectives of the project.
Those lessons from Phase One are already being applied to, and will continue to be applied to Phase Two as well where the scope for efficiencies is even greater precisely because it is at an earlier design stage.
HS2 also welcomes the reports acknowledgement of:
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The progress made since its 2013 report in clarifying the strategic objectives of the project as being to increase both capacity and connectivity to help re-balance the economy;
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The significant achievement represented by the progress made in navigating the parliamentary process to date with a ten to one, cross party majority at Third Reading in the Commons and the approval of the House of Lords at Second Reading;
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The success of the more structured approach HS2, the DfT and other relevant government departments have taken to regeneration compared to HS1 and other similar projects;
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The progress HS2 has made in building the internal capability to deliver such a massive project and to do so in the most innovative and, therefore, efficient and effective way.
That progress has allowed HS2 to increase its confidence in its ability to deliver Phase One on time from 53% to 60% in the last six months but it accepts the challenge from the DfT to increase that further to 80%.
As the report again acknowledges this process of balancing cost and schedule pressures has also been a feature of other major projects such as Thameslink and Crossrail.
Responding to the NAO report the chief executive of HS2, Simon Kirby, said:
The role of the NAO is to challenge projects such as HS2 and through that challenge improve the way they deliver for the taxpayer. This report does this and we accept that challenge.
It also, however, recognises the real progress we have made in taking the concept of HS2 and moving it nearer reality.
As the report says, HS2 remains a highly ambitious project, but as it also demonstrates there are real and substantial grounds why the public, government and parliament should have increased confidence in our ability to deliver the project. Our job is to keep earning that confidence going forward.