CH2M pulls out of £170m HS2 contract citing 'protracted delays and ongoing speculation' about competition

‘We have taken the decision to alleviate any further delays to this critical national infrastructure project,’ CH2M said

Josie Co
Business Editor
Wednesday 29 March 2017 16:28
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CH2M had been set to help develop a section of the network north of Crewe to Manchester and from the West Midlands to Yorkshire
CH2M had been set to help develop a section of the network north of Crewe to Manchester and from the West Midlands to Yorkshire

An engineering firm that was handed a contract reportedly worth £170m to help develop high-speed rail network HS2 has pulled out of the project fewer than two months after it was selected to complete the work.

The Government confirmed on 9 February that it had appointed US-based company CH2M to help develop a section of the network north of Crewe to Manchester and from the West Midlands to Yorkshire.

But on Wednesday, CH2M said it had decided to withdraw its interest, following what it called “continuing discussions” between HS2 and CH2M over the award of the contract.

Immediately after CH2M was awarded the deal, Mace – one of the unsuccessful bidders for the contract – reportedly raised concerns relating to a possible conflict of interest during the award process.

“As is a matter of public record, HS2 sought clarification from CH2M on a number of areas,” a spokesman for CH2M told The Independent on Wednesday.

In a separate statement, the company said it was pulling out of the contract as a result of “protracted delays and ongoing speculation” on the matter.

“We have taken the decision to alleviate any further delays to this critical national infrastructure project, which could ultimately lead to increasing costs to UK taxpayers, as well as to our firm,” it said.

It reiterated that it had “demonstrated all appropriate measures taken throughout to ensure the integrity of the procurement process”.

HS2 said it welcomed CH2M’s decision to withdraw but provided no further comment.

The HS2 lines in question are expected to open in 2033, providing extra capacity and better service between the UK’s largest cities, enhancing connectivity and reducing journey times.

CH2M’s withdrawal follows news earlier this week that the Government had agreed to pay two US energy companies close to £100m for botching the way in which it awarded a major nuclear decommissioning contract for a dozen redundant sites two and a half years ago.

Energy Secretary Greg Clark said on Monday that the Government had settled outstanding litigation claims filed by Energy Solutions, headquartered in Utah, and Bechtel, based in California, in relation to the 2014 award and tender process which he called “flawed”.

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