Chancellor of the Exchequer George Osborne today (24 September) announced a major new milestone for the governments High Speed 2 rail project, kick-starting the bidding process for phase one of the mega construction project.
At least seven new contracts will be opened up to companies, with a total combined value of 11.8 billion.
The Chancellor made the announcement at an event in Chengdu, China, aimed at wooing some of Chinas biggest investors to be part of the project as well as a raft of other major UK infrastructure projects.
Mr Osborne also announced a new HS2 partnering day between British and Chinese firms to explore joining up on bids for contracts, as well as launching the Northern Powerhouse pitch book.
The event is part of a wider five day tour of China by the Chancellor, aimed at deepening cooperation between the two countries and making China the UKs second largest export market.
HS2 forms a major part of the governments plan to rebalance the UK economy and build a Northern Powerhouse by providing high speed rail services from London to the Midlands, and the North.
Construction of phase 1 is due to start in 2017, and when opened will slash the travel time between London and Birmingham from 1 hour 21 minutes, to 49 minutes.
Work is also underway on developing plans to transform East-West rail links.
Speaking while travelling on part of Chinas vast network of high speed railways the Chancellor said:
This government is committed to rebalancing our economy and building a Northern Powerhouse, and improving transport links and launching HS2 is key to supporting long-term economic growth across the North and Midlands.
Thats why Im here in China today opening the bidding process for construction contracts worth 11.8 billion, which will propel HS2 forward.
We are truly entering a golden era of cooperation between our two countries, and its crucial that businesses and communities from across the UK feel the full benefit of forging closer economic links with China.
Transport Secretary Patrick McLoughlin said:
HS2 provides an excellent opportunity for businesses across the UK with 25,000 jobs created during construction and 3,000 when up and running.
The start of the procurement process for these significant contracts is a major step towards construction on HS2 getting underway in two years time and a massive opportunity to help rebalance our economy long before the trains start running in 2026.
HS2 Ltd chief executive Simon Kirby said:
The start of the civil engineering bidding process is a major milestone for HS2 as we continue to move towards the start of construction in 2017.
Over the next decade, the winners of these contracts will go on to build 230km of bridges, tunnels and earthworks and create thousands of jobs across the construction industry.
Together we will transform intercity rail travel in the UK, build specialist skills and expertise across the country, create at least 2,000 new apprenticeships and build a legacy to inspire the next generation of young engineers.
The government is currently organising an HS2 partnering day to give Chinese companies an opportunity to meet UK firms and establish potential partnerships to join up on bids.
The Chancellor is also inviting Chinese participation in the HS2 skills college, which is due to open in 2017.
A skills-swap programme would allow the UK to benefit from Chinas expertise as a world leader on High Speed? Rail, and help Chinese investors better understand the UK market.
The Chancellor is also encouraging Chinese companies to take part in an HS2 regeneration tour, which would involve visiting areas of huge commercial opportunity in London, the Midlands and the North.
Investors would have the chance to meet with relevant local authorities and visit station sites.
The launch of the bidding process takes the form of a pre-qualification questionnaire (PQQ) for the Main Civils Works, ie the surface route and tunnels for phase 1. At this stage suppliers will be allowed to express an interest into all 7 packages.
Following the PQQ, successful applicants will be invited to bid for a maximum of 4 packages at tender stage, with a maximum award of up to 2 contracts per tenderer.
7 contracts are split over 3 geographical areas (North, Central, South), along the phase 1 route from London to Birmingham. There will also be the option for additional contracts covering the route North of Birmingham, subject to ministerial decisions on this later in the year.
The civil contracts are the first tranche of the Main Works Packages and cover surface routes and tunnels. Tranche 2 comprises stations, and Tranche 3 comprises railway systems. These will be launched in 2016 and 2017.
Construction works will commence following Royal Assent of the Phase 1 Hybrid Bill which is currently being considered by Parliament.
Image by Department for Transport on Flickr. Used under creative commons.