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Boris Johnson to order boardroom shake-up at UK’s HS2 rail project

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Via Financial Times

Boris Johnson is set to announce a boardroom shake-up at High Speed 2 in an attempt to cut costs as he gives the controversial railway project the go-ahead early this week.

After months of deliberation, the prime minister is expected to confirm on Tuesday that construction can start on the first phase of HS2 from London to Birmingham and the Birmingham to Crewe section of the route’s second phase.

The sections to Manchester and Leeds, however, will be reviewed to ensure the plans are cost-effective. The estimated cost of the whole project was £56bn last summer but has since jumped to as high as £106bn.

HS2’s management and eight-member board will be overhauled, with additional non-executive directors brought in to help address the soaring price tag.

Mr Johnson is keen to distance himself from the Conservative-led governments of the past decade as the estimated cost of HS2 kept rising. He recently expressed his disappointment in the project’s management, telling a schoolboy interviewer on Sky News: “The people who did it spent far too much money, they were profligate . . . they just wasted money. And the whole way it was managed was hopeless.”

The decision to proceed will be welcomed by business leaders but anger dozens of Tory MPs who believe the scheme is a wasteful white elephant.

Map showing the route of HS2 lines and a chart showing the projected journey times of the new routes

The announcement caps a decade of political and financial problems for the planned railway, which has been beset by delays, contract scandals and concerns over poor management.

More than £8bn has been spent on the project since preparatory work began 11 years ago but construction has not yet started. Building on phase one is now expected to start this spring.

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The prime minister is expected to follow many of the recommendations in a review he commissioned into the project, led by former HS2 chairman Douglas Oakervee.

HS2, the state-owned company charged with delivering the railway, is likely to be stripped of its role managing the London terminus at Euston station in the centre of the capital.

It will be replaced with a new independent panel to deliver a single plan for Euston, integrating the existing 1960s railway station as well as the planned new HS2 terminus.

Work is so far behind at Euston that the prime minister is expected to propose that the line end temporarily at Old Oak Common in west London instead.

The latest estimated opening times are 2028-2031 for the first phase from London to Birmingham and 2035-2040 for the lines to Manchester and Leeds.

But the National Audit Office, parliament’s spending watchdog, warned last month that even these revised dates would not be met unless work started soon. However, contracts are still being negotiated and even on phase one only 70 to 80 per cent of the initial design work has been completed, according to the NAO.

Mr Johnson is ploughing ahead with HS2 because cancelling the project would appear to fly in the face of his promise to narrow Britain’s north-south divide and be a champion of infrastructure. He told the schoolboy interviewer: “In a hole the size of HS2, the only thing to do is keep digging. That’s what you’ve got to do. It’s a big hole.”

The government will try to assuage fears about the cost by insisting that it will still be able to fund smaller, local transport projects with a faster delivery schedule. Many Tory MPs are concerned that HS2 will not deliver immediate political benefits, in contrast to more modest local projects.

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A senior government source acknowledged those fears, saying: “What we want to do is show that infrastructure is about all projects — not just the biggest ones — for all parts of the country.”

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