Construction firms benefit from €9 billion in HS2 contracts

By Mike Hayes25 April 2023

HS2 has revealed that it has so far awarded UK-based firms tier 2 contracts totalling approximately €9 billion.

HS2 tier 2 awards are a major boost for UK contractors HS2 tier 2 awards are a major boost for UK contractors. Photo: HS2

The figures released show that more than 2,000 small and medium enterprises (SMEs) operating from within 12 UK regions, have benefited from the mega-project, which is expected to be ongoing for up to 20 more years.

The UK government recently announced a two-year ‘pause’ to some elements of the project, due to soaring costs and amid current economic challenges in the country.

Nevertheless, the majority of HS2’s elements have been given the go-ahead and thousands of companies are being kept afloat by the largest high-speed rail project in Europe.

Billions for SMEs

Latest figures show that awards to SMEs currently total just over €4bn, equating to a 45% share of the tier 2 contracts.

Over €1.1bn of this has been secured by micro businesses, employing between 1 and 10 people.

A further €765 million has been awarded to small business, with between 11 and 49 employees.

Karen Woolley, development manager at Federation of Small Businesses (FSB), said, “It is encouraging to see in black and white HS2’s level of spend with SMEs, which demonstrates the much-needed levelling of the playing field that the FSB has been calling for.

“At a time when trading conditions are quite possibly at the most challenging they have been for many years, smaller firms having the opportunity of accessing contracts with such an important infrastructure project as HS2 can provide that much needed boost to a company’s economic productivity, whilst also securing jobs and providing for economic stability.”

Nationwide contract distribution

One of the medium-sized businesses claiming the remaining €2.15 billion in tier 2 contracts is Walsall-based Altrad RMD Kwikform.

The company’s managing director, Mark Pickard, said, “Working on HS2 has given our business a timely boost, allowing us to rebound from the Covid-19 pandemic and giving us the impetus to invest in our people and hire more staff.”

The company has securing multiple contracts on HS2 over the last few years, working on sites in London, the Colne Valley and currently in Birmingham, where it is aiding the construction of a viaduct that will bring high-speed trains into the centre of Walsall.

Pickard said, “With years of construction still to go, we’re confident that our work on HS2 will continue to bring stability, prosperity and growth to the business.”

On March 9, the UK government confirmed that all phases of HS2 between Manchester and London Euston will proceed, with priority being given to the first operational phase of HS2, between Old Oak Common and Birmingham Curzon Street.

Rail Minister Huw Merriman said, “The benefits of HS2 will be felt for generations to come, creating extra capacity on our rail network and providing a sustainable option for travel, while boosting a skilled construction workforce in the process.”

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