Posted 19th April 2017 | 1 Comment

Bechtel wins controversial HS2 contract

BECHTEL has won the controversial HS2 Phase 2 contract which was relinquished by CH2M Hill in March after allegations of conflict of interest, but the House of Commons Transport Committee will be questioning transport secretary Chris Grayling and HS2 chairman David Higgins today (Wednesday).

Bechtel had been the runner-up in the competition for the £170 million deal. An HS2 spokesman said: “HS2 Ltd can confirm that Bechtel are being taken forward to the next stage of the 2b Development Partner procurement process. The bidder now enters the standstill period allowed for under the process prior to contract award.

“Following discussions, we are confident they are able and prepared to deliver the contract on time, on budget and to a high standard.”

One of the other contenders, UK firm Mace, had reportedly threatened to apply for judicial review of the decision by 3 April unless there was a rethink. In the event, USA-based CH2M announced its withdrawal on 29 March, saying it remained ‘fully committed to working with HS2 Ltd on delivering Phase 1 on time and within budget’.

CH2M continued that it had “demonstrated all appropriate measures taken throughout to ensure the integrity of the procurement process. Notwithstanding these efforts, we have taken the decision to alleviate any further delays to this critical national infrastructure project”.

The problems arose after several key people from CH2M had been employed in senior positions at HS2 Ltd. They include Mark Thurston, who was appointed chief executive in January and has now joined the government-owned company. CH2M executive Roy Hill had also been seconded to HS2 as interim chief executive after the resignation of Simon Kirby.

Transport Committee chair Louise Ellman said: “HS2 has the potential to deliver significant benefits. As with any investment of this size, however, it is essential that it is managed effectively.

“The withdrawal of CH2M from a major HS2 contract raises several questions which must be answered. We will be asking the Secretary of State and Sir David Higgins to explain the circumstances behind CH2M’s withdrawal and what lessons need to be learnt.”

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • James Dawkins, Sheffield

    Just a couple of questions which hopefully someone more familiar with the industry can take a stab at answering:

    1. What does the contract entail? What are Bechtel now responsible for?

    2. Why are HS2 Ltd awarding contracts for phase 2 before phase 2 has been approved by Parliament? What happens to the contracts if Parliament rejects the bill, as they hopefully won't but may well do, following the general election?

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