Winners of HS2 building contracts revealed

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The firm's share price tanked by more than 70% last week after a profit warning and an £845 million write-off on construction contracts.

By GCR Staff0 CommentsMajor contractors from France, Sweden, and Austria have won places on £6.6bn worth of civil engineering contracts for the first phase of the UK's High Speed 2 (HS2) rail line, set to run between London and Birmingham.

United Kingdom companies Carillion, Costain and Balfour Beatty are among the consortia who will undertake the world.

Balfour Beatty PLC's (BBY.LN) VINCI joint venture has received two contracts worth a total 2.5 billion pounds ($3.22 billion) for High Speed 2, the proposed high-speed railway linking London, Birmingham, the East Midlands, Leeds and Manchester.

But Transport Secretary Chris Grayling said the higher figure is "just nonsense".

"So it's not where one business has to deliver, it's a group of businesses that have to deliver, and they've all committed to doing so".

And in response to Mr Grayling's comment about treating communities with fairness, Mr Rukin added: "We'll believe it when we see it".

A number of joint venture consortia have been awarded the first contracts.

David Higgins, chairman of HS2 Ltd, said: "HS2 was always created to be much more than just a high-speed railway, and today we can see the opportunities it brings right around the country - spreading prosperity, acting as a catalyst for investment and rebalancing our economy 10 years before the railway even opens".

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While it is welcome work for Carillion, it is now struggling to contain rising debts - a outcome of cost over-runs on other key contracts.

Carillion has recruited EY, the accountant, to help it focus on "cost reduction and cash collection". "My priorities are to reduce the group's net debt and create a balance sheet that will support Carillion going forward".

The first phase of HS2, connecting London's Euston station with Birmingham in the midlands, is now scheduled for completion in 2026.

But this could see new homes in nearby Mexborough being pulled down, with numerous estate's residents finding out about the possibility just weeks after moving in.

The route of HS2 north is set to be revealed Monday (17th July), with phase one of the project, between London and Birmingham, "progressing well".

Mr Grayling will soon publish a Bill to deliver Phase 2a from the West Midlands to Crewe, with services expected to begin in 2027.

Mr Grayling said in addition to speeding up journey times, HS2 will support 16,000 jobs across the United Kingdom, with more than 100 Scottish businesses interested in the opportunities it will create.

This would see the project cost up to £104bn - nearly double the Government's estimate.

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