HS2 Ltd has completed the renegotiation of two of its largest civil engineering contracts, marking a significant milestone in the programme’s ongoing reset as it seeks to improve cost control and deliver the railway more efficiently.
New commercial agreements have been signed with the EKFB and Align joint ventures, which together are responsible for more than 100km of the high-speed route between London and the West Midlands.
The revised contracts form part of HS2 Chief Executive Mark Wild’s wider programme reset, designed to address cost overruns, improve commercial performance and deliver the remaining works at what the Government describes as the “lowest reasonable cost”.
New incentives replace previous contracting model
The original civil engineering contracts, agreed before construction began in 2020, have been criticised for placing too much financial risk on taxpayers while offering limited incentives for contractors to control costs or meet delivery targets.
By 2024, the original £15 billion budget allocated for the main Phase One civil engineering contracts had been exhausted, despite substantial work still remaining.
The new agreements introduce a revised commercial model that links contractor payments more closely to cost control and delivery performance, creating stronger incentives to complete work on time and within budget.
The changes are intended to support the Government’s ambition of delivering HS2 Phase One within the revised £93.2 billion funding envelope announced earlier this year.
Rail Minister Lord Peter Hendy said: “These new contracts are an important milestone in the reset of HS2. The waste and mismanagement of the past are behind us – we are now laser-focused on delivering this project efficiently and responsibly for taxpayers.
“By resetting contractor incentives and rewarding cost control, we are making sure every pound spent delivers real value and that the project is built at the lowest reasonable cost.
“Under Mark Wild’s leadership and with close ministerial oversight, HS2 is being built faster and more efficiently than ever before – across the West Midlands and West London over the next decade, while sustaining 31,000 jobs across the country.”
Two major contractors
The agreements cover two of the project’s largest delivery partners.
EKFB – a joint venture comprising Eiffage, Kier, Ferrovial Construction and BAM Nuttall – is constructing an 80km section of the railway between the northern portal of the Chiltern Tunnel in Buckinghamshire and Long Itchington Wood in Warwickshire.
Meanwhile, Align – made up of Bouygues Travaux Publics, Sir Robert McAlpine and VolkerFitzpatrick – is responsible for a 24km section through outer London and Buckinghamshire, including the Colne Valley Viaduct and the Chiltern Tunnel.
Mark Wild, Chief Executive of HS2 Ltd, said: “This is good news, but there’s more to do. Bringing an end to HS2’s cost overruns and delays is a shared ambition, and I’d like to thank every one of the parent companies at both EKFB and Align for their willingness to negotiate and their commitment to doing the right thing for British taxpayers.
“Investing in world-class infrastructure is vital to securing economic growth, but it cannot come at any cost. Today’s announcement represents a significant step forward in our mission to regain control of HS2.”
Construction continues at pace
HS2 says performance across the programme is improving as construction reaches its peak.
More than 30,000 people are now working on the project, with all 46 miles of twin-bore tunnels between Old Oak Common and Birmingham excavated, 108 million cubic metres of earthworks completed, and 177 bridges and viaducts currently under construction.
Sally Cox, Managing Director at EKFB, said: “EKFB has worked closely with HS2 Ltd to support the reset of the HS2 programme and has now reached a new commercial agreement. I’m proud of the strong working partnership between the teams at EKFB and HS2 Ltd which has supported the swift conclusion of the contract renegotiation phase. This agreement provides a clear path for the remainder of the civils works and we are committed to delivering our 80km section of the route in accordance with HS2’s delivery plan.”
Adrien Baudard, Project Director at Align JV, added: “The contract renegotiation has been an opportunity to strengthen our long-standing partnership with HS2 and build upon our shared objectives. As an integrated project team, we have proudly delivered landmark assets such as the Colne Valley Viaduct and the Chiltern Tunnel and are now focusing on preparations for a successful handover and transition to rail systems.”
Further negotiations ongoing
The renegotiated contracts are the first to be completed under the programme reset, with discussions continuing with HS2’s remaining civil engineering partners.
Negotiations are ongoing with Balfour Beatty VINCI, responsible for a 90km section in the West Midlands, and Skanska Costain STRABAG, which is delivering the 21km London tunnels section between West Ruislip and Euston.
HS2 has also strengthened its commercial capability, appointing a new Chief Commercial Officer and expanding its commercial team as part of the reset programme.
The overall programme reset is expected to continue until spring 2027, when HS2 Ltd plans to publish a new delivery baseline setting out the revised schedule for completing Britain’s new high-speed railway.
