Engineering firm CH2M pulls out of £170m HS2 deal
The engineering firm handed a £170 million deal to develop a section of HS2 has withdrawn its interest in the work amid concerns over alleged conflicts of interest.
American-based CH2M was chosen by HS2 Ltd last month to deliver Phase 2b of the £55.7 billion high speed rail line, running from Crewe to Manchester and Birmingham to Leeds.
But the contract signing was delayed as HS2 Ltd was reportedly investigating concerns from third-placed bidder Mace that there may have been conflicts of interest.
CH2M has been involved with HS2 Ltd since 2012 and was awarded a £350 million deal to develop Phase 1 of the line from London to Birmingham.
Mark Thurston, HS2 Ltd's new chief executive, is a former CH2M employee, as was his temporary predecessor Roy Hill.
It has been reported that dozens of CH2M employees are also on secondment to HS2.
Joe Rukin of the Stop HS2 campaign described CH2M's announcement as "clearly an admission of guilt over conflict of interest.
"They hope doing this now - at a good time to bury bad news - means their other contract awards will not be investigated."
John O'Connell, chief executive of the TaxPayers' Alliance think-tank, claimed "t he revolving door between HS2 Ltd and CH2M never passed the smell test" and "serious questions were rightly raised" around HS2 appointing staff from one of their contractors.
Liberal Democrat transport spokeswoman Jenny Randerson accused the Government of making " a clear error by not undertaking a thorough or proper process".
Conservative former cabinet minister Cheryl Gillan called for a transport minister to come to the Commons to "explain this extraordinary state of affairs".
She added: "This now raises questions over large amounts of taxpayers' money that are being sunk into this project."
CH2M released a statement insisting it has "taken all appropriate measures" in order to "ensure the integrity of the procurement process".
It continued: "W e 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."
The firm added that it is "fully committed" to delivering Phase 1.
An HS2 Ltd spokesman said: "As they have announced, CH2M have decided to withdraw from the Phase 2b Development Partner bid process, a decision which we welcome."
He added that HS2 Ltd will now open discussions with the runner-up in the bid process, Bechtel.
A Department for Transport spokesman said: "This is a matter for HS2 Ltd. There are strict rules around procurements and we expect all proper procedures to be followed."
CH2M has been involved in delivering a number of major UK projects, including the London 2012 Olympics and Crossrail.
Phase 1 of the HS2 scheme is scheduled to open in December 2026, with a second Y-shaped phase launching in two stages.
Phase 2a from the West Midlands to Crewe will open in 2027 and Phase 2b, from Crewe to Manchester and from the West Midlands to Leeds, South Yorkshire and the East Midlands, will begin operation in 2033.
Legislation for Phase 1 passed its final hurdle in Parliament in January and c onstruction work is set to begin in the coming weeks.
When the section is open it is expected to nearly triple the number of rush-hour seats on the route from 11,000 to about 30,000.
Most intercity trains will run on the HS2 network, allowing more commuter services on the West Coast line.
Opponents of the project claim it will create havoc during construction and have disastrous environmental consequences.