Latest Public Sector News

24.09.15

Osborne opens bidding process for £11.8bn high speed rail contracts

The government’s High Speed 2 (HS2) rail project has reached a “major milestone” as chancellor George Osborne opened the bidding process for the first phase of construction works.

During a five-day tour of China, Osborne invited suppliers to start bidding for seven new contracts with a combined value of £11.8bn.

He hopes to encourage some of China’s biggest investors to take part in England’s biggest infrastructure project in an attempt to “rebalance the economy and build a Northern Powerhouse”.

Osborne also launched a new ‘HS2 partnering day’ between British and Chinese companies to explore the possibility of joining up on contract bids and launching the Northern Powerhouse ‘pitch book’. Chinese firms will be given the opportunity to meet national firms and establish potential partnerships for the project.

He is also inviting Chinese participation in the HS2 ‘skills college’ due to open in 2017, as well as take part in a HS2 ‘regeneration tour’ – which will involve visiting areas of key commercial opportunity in the capital and across the north.

Investors will also have the chance to meet with councils and visit station sites.

The high speed rail will serve London and the Midlands by linking the capital to Birmingham and Manchester.

Phase 1 works are due to start in 2017 and will slash travel time between London and Birmingham in half, reducing it to 49 minutes, while freeing up capacity on the classic rail network for new services.

Speaking during his trip, the chancellor said the new link will be vital to support long-term economic growth across the country, propelled partly by the new contracts.

“We are truly entering a golden era of cooperation between our two countries, and it’s crucial that businesses and communities from across the UK feel the full benefit of forging closer economic links with China,” he said.

Transport secretary Patrick McLoughlin MP added: “The start of the procurement process for these significant contracts is a major step towards construction on HS2 getting underway in two years’ time and a massive opportunity to help rebalance our economy long before the trains start running in 2026.”

Winners of the seven deals will go on to build 230km of bridges, tunnels and earthworks over the next 10 years.

Chief executive of HS2 Ltd, Simon Kirby, said the project will “transform intercity rail travel in the UK, build specialist skills and expertise across the country, create at least 2,000 new apprenticeships and build a legacy to inspire the next generation of young engineers”.

Frances O'Grady, TUC general secretary, added that project plays a "key role" in boosting the construction and rail engineering sectors as well as narrowing the "north-south divide".

She said: “It must be built in a way that maximises high-skill jobs and apprenticeships. And HS2 must deliver real benefits to passengers, communities and the environment.

“This is an opportunity that we simply cannot afford to squander. We need more investment in infrastructure on this scale to boost productivity and help UK companies to compete globally.”

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