30Mar
By: The Gateway Team On: March 30, 2017 In: Construction, Investment Comments: 0

A controversial design contract for the £55bn High Speed 2 (HS2) rail project contract has been abandoned today.

Many, in the wake of the triggered Article 50 yesterday, will think this is economically linked or profit related. However, American engineer firm – CH2M Hill – has dropped the £170 million deal following allegations of cronyism.

Today, Jacqueline C. Hinman, the Chairman and CEO of CH2M, wrote to the Chairman of HS2 Ltd, David Higgins, to formally advise him of the firm’s “withdrawal of interest in the Phase 2b Development Partner Contract. Following a continued discussion between HS2 Ltd and CH2M with regard to the award of the contract”.

In a press release the firm touched upon its “well-earned reputation for client-centric service exemplifying the highest standards of ethics, transparency and corporate citizenship”; which links aptly with the allegations that have been made and why they would want to distance themselves from this type of negative reports.

The US firm put the halting down to “the protracted delays” and the “ongoing speculation risks further delays” which will be a furthered cost to the “UK taxpayers, as well as to the firm”.

“CH2M remain fully committed to working with HS2 Ltd on delivering Phase 1 on time and within budget,” said the firm in its press release but the £70m “phase 1” contract (which came out 49 percent over-budget at over £100m) was behind schedule as the government just received Royal Assent in February.

Mace, the UK construction company that completed the Grand Central Station in Birmingham, argued that the US firm should not have got the contract because of claims that there is a “revolving door” policy between CH2M and HS2 for senior positions and later, threatened to take legal action by April 3rd.

A few months before gaining the coveted contract, CH2M CEO, Roy Hill was working in secondment for HS2 as their interim chief executive. 3 months later in January, CH2M’s European director Mark Thurston, replaced Roy as HS2’s new chief executive.

“Most people don’t want HS2, seeing it as an exorbitant waste of taxpayers’ money.  With this particular contract, only an idiot would think that such an apparently clear conflict of interest would pass without any comment,”

“What is astounding though is the claim that they are doing it to alleviate further delays.  HS2 is seriously behind schedule.  Royal Assent for Phase 1 had been due in 2015, but was only got in the last few weeks.  Phase 2 is also behind,” added Ms Gaines. said Penny Gaines, Chair of Stop HS2.

Ministers will apparently meet with Mace and other bidders tomorrow to talk about a potential contract going forward. Although, it is thought that it will not go to Mace or Bechtel, who were both unsuccessful in their bids first time around.

But watch this space for any potential investigations made into both parties and the allegations of cronyism.

Have a look at the HS2’s interactive map to see how far they have got.

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