Time to declare independence – 3: HS2, the most blatant example of UK/USA’s revolving door/vested interest ridden politics
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“A gravy train for consultants, involving banks, lawyers and government officials” – and industry?
Added to this reaction is horror at news of the emerging and all-too familiar reports of conflicts of interest – a polite expression for what is a form of apparently legal corruption.
A skeletal chronological summary of news about the nominated leadership of the HS2 project and some contract awards follows, based on reports in the Financial Times, 2015-2017.
The Institute of Directors suggested that it would be cheaper to knock down Birmingham and build a new city 20 minutes closer to the capital, while the Institute of Economic Affairs cast doubt on HS2’s regeneration benefits, pointing out that HS1 failed to regenerate Kent, with the average employment rate in the south east of Britain 5% lower than before the high speed service was introduced.
Portugal, Poland, Spain, the Netherlands and Belgium have all cancelled planned or existing high-speed rail projects and some argue that Britain should follow suit. Martin Blaiklock, a consultant on infrastructure and energy project finance, said that extra capacity could be built more cheaply by adding to existing railways. “[HS2] is very high-risk,” he says. “It is a gravy train for consultants, involving banks, lawyers and government officials.”
Conflict of interest emerges in 2015-16 in favour of an American multinational
It was reported that Roy Hill, managing director of the US-headquartered engineering company CH2M, has been seconded to HS2 acting chief executive on a temporary basis from November, after Simon Kirby, the former chief executive, elected to leave for Rolls-Royce. Mr Hill worked at HS2’s offices in Canary Wharf for CH2M between 2012 and 2014 after the company won the role of development partner carrying out preparatory work, in a contract worth about £70m.
In Gill Plimmer’s FT article yesterday, readers were reminded that Mark Thurston, an executive at CH2M, has now been appointed chief executive of HS2 Ltd, replacing the aforementioned Roy Hill. He will take over in March.
David Higgins, HS2’s chairman, said he recognised the need to avoid any conflict of interest and that Mr Thurston would consequently cut all links with his previous employer. “They will be treated in the same way as any other supplier – no more or less favourably than that,” Mr Higgins said of CH2M.
CH2M has already been paid around £500m for working on the line as development partner and then the delivery partner on Phase 1 of the high-speed railway project, from London to Birmingham. Phase 2 covers Birmingham to Manchester and Leeds.
Mace, a large consultancy and construction company, which worked on the London 2012 Olympics and plans for Hinkley Point C, has written to HS2 Ltd, set up by government in 2009, announcing that it intends to challenge the decision to award CH2M, the US engineer, a contract to design the second phase of the London to Manchester line. “As a British-owned company, we were naturally disappointed with HS2’s decision and are looking closely at our options,” Mace said.
Ms Plimmer states that Mace is threatening to sue the state-owned company behind Britain’s planned £56bn high-speed railway line over alleged conflicts of interest..
She quotes a source close to the legal process who said it was “extremely likely” that Mace would file a claim in the High Court this week. “Mace is concerned over conflicts of interest. It is looking for an injustice to be corrected,” the source said. “CH2M has been awarded half a billion pounds worth of contracts even though nothing has been built yet.” CH2M declined to comment.
Legal action could delay the project, which is expected to get Royal Assent this week, paving the way for construction to start this year. Final amendments to the HS2 bill are being debated on Monday in the House of Commons.
Tony Berkeley, the Labour peer and a former engineer who worked on the Channel tunnel, said the situation “smells”. “There must be other companies in the UK who are capable of doing it. Is HS2 actually competent to do the procurement or are they just relying on CH2M to do the whole thing and procure themselves?”
Posted in Conflict of interest, Corporate political nexus, Democracy undermined, Environment, Finance, Government, Housing, Legal issues, Lobbying, Manufacturing, Outsourcing, Parliamentary failure, Planning, Privatisation, Revolving door, Transport, Vested interests