Out-Law / Your Daily Need-To-Know

HS2 company prepares £7bn worth of civil engineering contracts for tender

13 Aug 2015, 5:03 pm

Contracts for around £7 billion worth of construction work needed as part of the proposed High Speed 2 (HS2) national high-speed rail line will be put out to tender next month, according to press reports.

The Financial Times reported that at least eight consortiums made up of Europe's largest construction companies intend to bid for the work, even though the legislation underpinning the project would not be finalised until late 2016 at the earliest.

HS2 Ltd, the publicly-funded company responsible for developing and promoting the new railway line, told the Financial Times that procurement would begin in September. The early start would allow successful bidders to "invest in recruitment, training and education" and would "help [HS2 Ltd] ensure the project remains on time and on budget", a spokesperson said.

Construction on the first phase of HS2, between London and Birmingham, is expected to begin in 2017 assuming that the High Speed Rail (London to West Midlands) Bill completes its parliamentary passage as anticipated. This first phase is currently due for completion in 2026, with a future second phase connecting the line to Crewe and then onwards to Manchester and Leeds planned by 2033.

According to the Financial Times report, HS2 Ltd will contract for seven lots worth between £700 million and £1.1bn each beginning in September. These lots are expected to include the construction of tunnels and viaducts, project management work and 'enabling' works, such as clearing sites, demolition and relocating utilities infrastructure at project sites.

Infrastructure law expert Richard Laudy of Pinsent Masons, the law firm behind Out-Law.com, said that it would be no surprise if contactors wished to include compensation for the cost of producing tender documentation should the project be abandoned in their bids, "given the millions of pounds at stake".

"However, these provisions are notoriously difficult to enforce, given that they would need to be accepted by the government in its role as contracting authority," he said.

"The problem for the government will be if a number of contractors ask for the same guarantees, as this could be seen as indicating a lack of confidence in the project and might force the government's hand to offer compensation," he said.