‘Financial catastrophe HS2 proves need for private sector interest’ – MP
uture Government-backed infrastructure projects must pass a sniff test with businesses to prevent another “financial catastrophe” like HS2, ministers have heard.
Greg Smith, Conservative MP for Buckingham, told the Commons that the “total lack of interest” from the private sector should have been a “flashing red beacon” about the high speed rail project.
HS2 aims to create direct, fast rail links between London, Birmingham and Manchester, while freeing up capacity on existing railway lines for shorter journeys.
Transport Secretary Mark Harper delayed the timeline of the project earlier this year due to continuing cost pressures.
The eastern leg of HS2 between Birmingham and the East Midlands meanwhile faces an uncertain future.
Tory MP Mr Smith, who has long been a critic of HS2, told the Commons: “The challenge he has (is) in reducing costs in the way Government projects are set up in the first place.
“They blow their budgets because delivering them, the people that are set up to deliver them, always know the taxpayer will bail them out.
“Will he look at introducing a new private sector viability test for Government projects where a lack of interest from the private sector is the warning light that the project is wrong?
“For example, the total lack of interest from any private sector investor should have been the flashing red beacon against the financial catastrophe that is HS2.”
Cabinet Office minister Jeremy Quin replied that the Government takes the “challenges of infrastructure very seriously”.
He added: “It is incredibly important to bear down on inflation for a whole range of reasons, but one of them is the impact on our capital projects, clearly inflation has had a dramatic impact over the last 18 months.
“In terms of that challenge I would say that the IPA (Infrastructure and Projects Authority) is a force for challenge within Government projects.
“The IPA is supporting HS2 itself through delivery, through advice and assurance, in particular via the annual assurance updates, which does help provide external challenge to the department when it makes regular reports to Parliament, including one this month I believe.”