HS2 Phase One UK
Context
- HS2 is a new high-speed rail line that in Phase One will connect London with Birmingham, and later with Manchester and Leeds. It will serve over 25 stations connecting around 30 million people and will significantly improve travel times between London and the Midlands.
- Trains will travel on dedicated high-speed tracks, increasing capacity on existing lines for slower commuter and freight trains.
- Phase One involves 225 km of dedicated track, 51 km of tunnels, and 16 km of viaducts.
- Phase One has a funding envelope of GBP35-45 billion (USD48–62 billion) and will be complete between 2029 and 2033.
Problem
- Traditionally, projects are developed in a sequential manner with design and construction separated, meaning contractors can rarely make any meaningful input into the design of a project until design is nearly complete, and modifications would require substantial re-work.
- This leads to a lack of consideration during the planning and design of a project on ‘buildability’, contributing to poorly optimised designs, unexpected cost increases, delays, and other negative project outcomes. This is especially apparent in projects such as HS2 that are highly complex and expensive to deliver, where even minor improvements to construction time and cost can yield significant savings.
- Additionally, the infrastructure industry and delivery agencies such as HS2 Ltd now have wider considerations beyond just delivering a project, such as delivering positive social outcomes for communities in and around the project area.
Improvement
- HS2 Ltd undertook an extensive Early Contractor Involvement (ECI) process over the course of project development, integrating design and construction teams under the following process:
- The tender process did not require any design development, with tender evaluation focusing on technical and commercial criteria with the objective of awarding to the team with the best capabilities, skills, capacity, and appropriate collaborative culture to deliver best value-for-money.
- In Stage 1 of development, the selected contractor is to develop and optimise the design, ensure alignment with the project’s objectives, commence construction planning (including identifying opportunities for off-site manufacturing and supply chain engagement), and develop the target price.
- In Stage 2 of development, the contractor then takes responsibility for and completes the detailed design and construction works.
- Contractors appointed for ECI activities are responsible for traditional Early Works activities, which include archaeology, ecology surveys, site clearance, demolition, utility diversions, ground remediation, and road realignment.
- HS2 Ltd is developing contract incentives that will deliver rewards where design and construction innovations and risk mitigations are developed in Stage 1 and delivered as planned in Stage 2, and reward wider collaboration – such as groups of suppliers working together to minimise overall cost.
- To better connect with communities in and around the project area and deliver positive social outcomes to the wider community, HS2 Ltd has launched the Empowering Communities initiative. It is a 10-year social legacy program launched in July 2020 and delivered by HS2 Ltd London contractors that aims to create jobs for unemployed and homeless people, upskill local workers and offer apprenticeships, and provide support for local community projects.
Stakeholders
- HS2 Ltd
- Department for Transport
- CS JV (Costain Group Plc, Skanska Construction UK Limited) – Area South Enabling Works
- Fusion JV (Morgan Sindall Construction & Infrastructure Ltd, BAM Nuttall Limited, Ferrovial Agroman (UK) Limited) – Area Central Enabling Works
- LM JV (Laing O’Rourke Construction Limited, J. Murphy & Sons Limited) – Area North Enabling Works
- Costain Group, Skanska Construction, STRABAG, Mace, Dragados, Arup, and Network Rail – Empowering Communities.
Timeline
- 2012 – Government decision to proceed with HS2 and decision on preferred route for Phase One
- 2013 – Safeguarding for Phase One. Desktop study completed on supply base. Initial workshops with supply base. Hybrid Bill submitted to Parliament. Property compensation re-consultation for Phase One. Supply Chain Conference in Birmingham
- 2014 – Phase One Market Engagement launches. Autumn - Second Supply Chain Conference
- March 2015 – Phase One Early Works Contractor tendering process commenced
- November 2016 – Phase One Early Works Contractors appointed through tenders
- February 2017 – Phase One pre-development works complete
- June 2020 – Empowering Communities initiative launched
- September 2020 – Phase One Main Civil Works commence
- 2020/21 – Phase One Early Works progressively complete
- 2028 – HS2 Phase One complete.
Results / impact
- The proposal to use ECI on HS2 received overwhelming support from the market during the government’s engagement process. The ECI contracts used to build HS2 Phase One have an average value of GBP800 million (USD1.1 billion), with over GBP5 billion (USD7 billion) of work being tendered under an ECI arrangement.
- ECI delivered benefits to the HS2 Phase One program including:
- Integrating design development and construction planning at an early stage, allowing the contractor, engineer, and key supply chain members to develop innovative solutions
- Providing more time for planning and the preparation of the construction program
- Enabling companies to plan for the recruitment, training, and retention of personnel needed during the construction stage, appoint key supply chain partners, and source long-lead-time items
- Providing greater opportunities for the integrated team to support stakeholder management to improve the management of risk and health and safety planning during the planning stage.
- Since its launch, Empowering Communities has provided support for science, technology, engineering, and maths education for 11,000 school children in London and provided employment for over 200 previously unemployed people and nine homeless people.
Key lessons learnt
- While ECI delivered several benefits regarding improved cost and time estimation and management and improved ‘buildability’, it does not eliminate the risk of unexpected delays and cost increases. In fact, the ECI process coincided with an increase in total project costs over the original 2015 estimate as more detailed design, planning, and investigation works were undertaken.
- The increase in cost estimates led the UK Government to commission a full review in 2019 into ‘whether and how to proceed with HS2’. The full business case for Phase One was publicly released in April 2020, with a revised and agreed funding envelope of GBP45 billion.
- A paper by Cambridge University in partnership with Laing O’Rourke investigating if early contractor involvement is beneficial to the UK construction industry found:
- The use of protected dialogue, or multi-contractor ECI, is a progressive step for this procurement route
- Despite being rightly recognised as key contributors to an ECI process, the lower tier supply chains were found to be held back due to an isolation of commercial benefits and collaborative ideals from the wider project community, often driven by a reversion from main contractors to competitively tendered arrangements.
- HS2 Ltd has engaged significantly better with the supply chain ecosystem than other major projects to date, setting up multiple forums. This has enabled improved skills within delivery teams, however it has yet to be seen whether there are enough commercial and collaborative mechanisms in place to achieve a true integrated delivery team from the client down to the supply-chain.
- Use of community engagement programs such as Empowering Communities is a valuable way to provide positive and ongoing social outcomes beyond delivery of core infrastructure, for communities directly affected by the project. The programs provide opportunities to disadvantaged members of the local community and improve the standing of the project and the organisations involved in its delivery among the local community.
Useful links and related resources
HS2 Phase One: London to West Midlands
UK Government policy paper: HS2 Phase One full business case
Presentation by Richard Mould, Head of Procurement, HS2: Procuring projects successfully using NEC3
BBC article - HS2: When will the line open and how much will it cost?
University of Cambridge Transforming construction: impact case study
Last Updated:
16 October 2021