The government is set to announce a delay of at least two more years to the HS2 project, amid revelations of a "litany of failures" causing costs to skyrocket.
Transport Secretary Heidi Alexander is preparing to disclose the contents of two critical reports on Wednesday afternoon, including an internal review by HS2 new chief executive Mark Wild, as reported by .
Alexander will declare there is now "no reasonable way" to complete the high-speed railway within the original timeframe and budget although she will stop short of setting a new deadline for its completion.
Reports from The Telegraph suggest that the high-speed line, intended to connect London with Birmingham after the scrapping of the Northern extension, will not be finished until after 2033.
On Wednesday, the Transport Secretary aims to "draw a line in the sand" and initiate a fresh approach to managing the º£½ÇÊÓƵ's major infrastructure projects.
HS2 faces fraud allegations
Amid these developments, HS2 has come under scrutiny over allegations of fraud involving contractors.
A source informed The Times that Alexander plans to confront the fraud accusations "head-on" during her presentation and assert that there will be significant repercussions.
Currently, HS2 is probing two companies regarding the management of payroll for certain employees.
Whistleblowers have claimed that senior officials within HS2 have artificially inflated cost estimates to ensure continuous flow of government funds. One such whistleblower, Stephen Cresswell, received £300,000 in compensation following a case for unfair dismissal at the employment tribunal earlier this year.
"Alexander aims to change the course of the entire situation. Wild has been assigned to review the whole project and today's speech is intended to address these new revelations and consider how we progress," said an insider.
"There has been a complete absence of ministerial oversight in the past and we need to rectify that so the same errors are not repeated on Northern Powerhouse Rail or the Lower Thames Crossing."
The cost of HS2 remains clouded in uncertainty. Some current estimates place it at over £100bn, a significant increase from the initial budget of £38bn (based on 2009 prices).
A report by the public accounts committee earlier this year labelled HS2 as a "textbook example of how not to manage a project" and a risk to the º£½ÇÊÓƵ's reputation.
Raj Kandola, acting deputy chief executive of Greater Birmingham Chambers of Commerce, said: "This latest setback is hugely frustrating but not surprising given the ongoing reports about the overall cost of delivering HS2.
"Here in Greater Birmingham, we have already seen the impact HS2 has had in driving investor confidence across the region as well as the thousands of jobs and apprenticeships that have been created.
"Businesses want to see Government take control of the situation and deliver a clear and cost-effective plan to get the project back on track.
"They must not lose sight of the wider socio-economic benefits and the transformational impact HS2 will bring if delivered properly."
High Speed Rail Group, the body that campaigns for improved rail infrastructure, said: "HS2 has long required a fundamental reset and today's reports mark an important step in that direction.
"Under the leadership of Mark Wild, the project is being refocused after years of instability where repeated chops and changes to scope have inflated costs and disrupted delivery.
"This reset begins the difficult but essential task of restoring confidence in one of the º£½ÇÊÓƵ’s most vital infrastructure projects.
"The supply chain remains fully committed to supporting HS2 in delivering the project with greater efficiency and improved productivity. Work is already under way to ensure it is delivered as cost effectively as possible going forward.
"Rail infrastructure remains key to turbo-charging the economies of our regional cities.
"If delivered successfully, HS2 will unlock national capacity, enhance regional connectivity and drive long-term economic growth across the º£½ÇÊÓƵ, setting the whole country up for future success."
