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Good news for HS2 contractors

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During the GB economic downturn, civil engineering margins came under considerable pressure. But now the cost of key government infrastructure projects – such as High Speed 2 and the Northern Hub rail upgrades – is set to rise as labour and material prices jump up, the Royal Institution of Chartered Surveyors has warned.

[‘Infrastructure hit by costs rise’, Scott Campbell, Daily Telegraph,
6 Apr 2014]

[…] Civil engineering tender prices, which came under pressure during the economic downturn, are set to increase by 24pc during the next five years as workers – buoyed by an increased market demand – negotiate for higher wages from “stronger” bargaining positions, according to the Royal Institute of Chartered Surveyors.

[…] As the cost of the controversial HS2 project – in which a high-speed railway will be built between London and other UK cities – soars into the billions, any potential rise will likely be met with disapproval from voters.

[…] An HS2 spokesman declined to comment.

An unusual feature of the HS2 project is the absence of a conventional customer – supplier delineation. HS2 Ltd is highly dependent on contractors, and the project is effectively being run by contractors in their own interests. As happened with the AVE project in Spain, what would be ordinarily be considered as ‘costs’, are being represented as ‘benefits’, for political purposes.

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Written by beleben

April 7, 2014 at 11:54 am

Posted in High speed rail, HS2

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