Mark Wild lays bare scale of HS2 failures as he sets out plans to make suppliers take on more risk

The chief executive of HS2 has exposed the scale of delays and cost overruns on the rail project as he outlined plans to “regain control” of the line’s main civils contracts.

In a letter to transport secretary Heidi Alexander published yesterday, Mark Wild said HS2 would “reset the supply chain” to ensure contractors take on more risk and are rewarded for minimising costs.

He also warned that “significant additional financial pressure” had accumulated since the most recent cost estimate of £61.8bn in June last year, which the project had been attempting to stabilise “without success”. 

It comes after Alexander confirmed the remaining section of line between London and Birmingham would miss its 2033 deadline as she described the project as an “appalling mess”.

In a statement to MPs yesterday, Alexander blamed cost overruns and delays on a “litany of failure” including the decisions by previous governments on the award of contracts for main civils works.

Wild said these contracts had been awarded “at a scale never seen before in UK infrastructure”, but using a commercial strategy which placed “almost all” risk on HS2 Ltd, the project’s delivery body.

He said this effectively turned the contracts into cost-plus arrangements which resulted in contractors not being “sufficiently incentivised” to his cost targets while incentivising short-term schedule over managing overall cost.

Wild pledged to reset these arrangements so that “more risk is more appropriately shared with the supply chain”, warning suppliers that this would involve a “challenging negotiation” which may require “robust action” from the government.

The former Crossrail chief executive, who Alexander credited with turning the delayed Elizabeth Line project around after a series of delays, said HS2 Ltd currently “does not operate like an expert builder of a railway”.

He highlighted multiple cultural issues that “run deep” at the company, which he described as too bureaucratic, process-driven and risk-averse, while criticising a lack of accountability with  “individuals feeling disempowered to make decisions or drive change”.

“Over the coming months, building on steps taken over the last year and a half, HS2 Ltd must become a lean, expert delivery organisation, focused on performance, outcomes, and cost discipline. Crucially, the cost of running the organisation must be reduced,” he said.

Wild also revealed he had considered pausing the entire project during the planned reset, but had opted against this approach because of the risk of adding further cost and delay.

Instead, he said he would stop all activity that “does not solely support the reset”, without naming which parts of the project would be affected.

He said he had already “significantly reduced” the number of non-permanent labour contractors in efforts to control costs, while senior managers will receive no performance related pay increases and executives will take no bonuses for the 2024/25 financial year.

Outlining further elements to the reset, Wild said he would adapt the method he applied when working on the Elizabeth Line, including developing “simplifying the day one railway”.

This could result the line opening with “slightly reduced” running speeds and removing automatic train operation while protecting the long-term flexibility of the project to deliver its full benefits.

Wild also said he would “radically simplify” HS2 Ltd and reset the project’s relationship with the government to “establish alignment and enable successful delivery”.

As part of the reset, former Transport for London (TfL) commissioner Mike Brown has been appointed as the new chair of HS2 Ltd. 

Brown was also a former chief operating officer of the London Underground, managing director of Heathrow Airport and left TfL in 2020 to become chair of the delivery authority for the restoration and renewal programme for the Houses of Parliament.

Alexander said yesterday: “This is a new era of leadership the project desperately needs, with Mike bringing significant experience as a former TfL commissioner. 

“Mark and Mike were part of the team with me that turned crossrail into the Elizabeth Line. We’ve done it before and we’ll do it again.”