HS2 and CH2M

Wednesday 5th April 2017 Lords Chamber

Question

15:30

Asked by

[Baroness Randerson]

To ask Her Majesty’s Government whether they intend to hold an inquiry into the proposed contractual arrangements between HS2 and CH2M.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)]

My Lords, the Government will not be holding an inquiry, as this is a matter for HS2 Ltd. HS2 Ltd has undertaken a thorough review in light of the queries raised. Decisions on any further steps are a matter for the board of HS2 Ltd and may include increased scrutiny of compliance by bidders with HS2’s requirements with respect to conflicts of interest, particularly for HS2’s higher-value or higher-risk procurements.

[Baroness Randerson (LD)]

My Lords, I fear that that Answer sounds a touch complacent on the Government’s part. This is a depressing indictment of HS2’s working practices. In view of a number of problems recently at HS2, is the Minister still confident that the first phase of HS2 will be completed within budget and on time? Can he confirm that the Government are still fully committed to phases 2a and 2b?

[Lord Ahmad of Wimbledon]

I cannot agree with the premise of the noble Baroness’s initial comments. When issues came to the fore, HS2’s due processes were followed and CH2M took a decision which I think we all regard as the right one at that time. The Government are absolutely committed to HS2 in all its stages—she referred particularly to stages 2a and 2b. We remain on course also to deliver on the hybrid Bill by 2019.

[Lord Framlingham (Con)]

My Lords, given the deep and growing concern about this ridiculously expensive and unnecessary project, will the Minister commit today to making sure that it is subject to the most scrupulous transparency so that we can all see, as it progresses, just how expensive, how complicated and how ridiculous it is?

[Lord Ahmad of Wimbledon]

I acknowledge that my noble friend has not been the biggest fan of this project. As I am sure noble Lords will acknowledge, this underwent full scrutiny during the passage of the Bill in both the House of Commons and in particular in your Lordships’ House. My noble friend referred to transparency. I am sure that he will acknowledge that many elements of the business contracts awarded are of a confidential nature and that it would be totally inappropriate to require that they were all fully transparent.

[Lord Berkeley (Lab)]

My Lords, why have the Government allowed this potential conflict of interest to fester for so many months? The two senior civil servants in the department left last week. I still have not had an answer to evidence that I submitted to the noble Lord and other Ministers that the cost of phase 1 will be about double what the Government say it is. Are the Government, HS2 and the Minister’s officials really committed to getting the governance right, the costs right and the programme right, or is this the start of rats leaving a sinking ship, which I hope it is not?

[Lord Ahmad of Wimbledon]

To continue with transport analogies, HS2 remains on track, so there are no sinking ships. The noble Lord referred to two senior civil servants within the DfT. One is the Permanent Secretary, who has a new role at the Home Office; I am sure that the noble Lord will appreciate that there is a long recruitment process. The other was the director-general of HS2, who is taking up a post at Oxford University. We wish them both well in their new roles.

[Lord Bradshaw (LD)]

My Lords, might the Minister turn his attention to Crossrail? It is a major infrastructure project. There are many such infrastructure projects, including HS2. The Crossrail management team has stayed the same all the way through the project and it looks as if it is going to be delivered as it was planned. Other infrastructure schemes have suffered changes of personnel and changes of consultant throughout their life. Will the Government look at making the people who start projects stay with them so that we can judge their performance?

[Lord Ahmad of Wimbledon]

Let me assure the noble Lord on the subject of Crossrail. The fact that it is delivering on time, the management is in place and it is on budget has nothing to do with the fact that I am the Crossrail Minister. On the point he raises about large infrastructure projects, of course he is right: we want a sustained level of continuity in management for all large infrastructure projects. That is an important part of the delivery of all projects and I note his concern in that respect.

[Lord Rosser (Lab)]

As I understand it, in January of this year it was announced that the European managing director of the global engineering company CH2M, which is mentioned in this Question, would be the new chief executive of HS2. Last month in a Written Answer, the Minister said that there were 84 CH2M people located in HS2 Ltd offices, with 37 CH2M staff on secondment to HS2. In view of this, how many of the other bidders had similarly close connections of this kind with HS2 at the time decisions were made on which bid should be accepted for the phase 2b development contract? Can the Minister confirm—I think he has half said it, but I am not entirely sure—that the Government are satisfied, in the light of what I have said, that the procurement process up to the time that HS2 said in February that CH2M would become its phase 2 development partner was run in accordance with and in the spirit of the laid-down guidelines, standards and requirements with which HS2 is presumably expected by the Government to comply?

[Lord Ahmad of Wimbledon]

The short answer to the second part of the noble Lord’s question is yes. In terms of the specifics—the other bidders and the numbers involved—I will write to him.

[Lord Campbell-Savours (Lab)]

Does that mean that we will be told whether Bechtel had people inside HS2 as well?

[Lord Ahmad of Wimbledon]

I am sure that the noble Lord raises that question as he is aware of other bidders. Again, I am sure he will respect the confidentiality of the allocation and award of the DP contract, which has still to be made. As I said, I will take back the questions of the noble Lord, Lord Rosser, and ensure that other noble Lords who are interested are accorded a reply.

[Lord Foulkes of Cumnock (Lab)]

My Lords, is it right that the business case for HS2 was based on it being extended to Scotland? When is that going to happen?

[Lord Ahmad of Wimbledon]

As the noble Lord is aware, Scotland will benefit. Indeed, the first phase and phases 2a and 2b will be of net benefit, so I can assure him that when he travels from London to Scotland he will arrive in good time; indeed, quickly.