HS2: British Prime Minister Rishi Sunak scales back giant rail project as companies warn of a blow to their credibility

London
CNN
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British Prime Minister Rishi Sunak has halted Britain’s largest infrastructure project, despite warnings from business leaders that the shift would harm… Investor confidence in the country.

On Wednesday, Sunak announced plans to scale back High Speed ​​Rail 2, known as HS2, the government’s flagship transport project aimed at boosting rail capacity and cutting journey times between London. Birmingham And Manchester – the three largest cities in England.

The government will now scrap the remainder of the project, canceling the high-speed train line from Birmingham to Manchester, and dashing hopes that it would bring much-needed investment to less affluent parts of the UK.

Sunak said at the Conservative Party conference in Manchester, northern England, that the money saved would instead be reinvested in “hundreds” of new transport projects in the English central regions and the north of the United Kingdom.

He added: “This means investing £36 billion in projects that will make a real difference across our country.” “Our plan will create more growth and opportunity here in the North than any faster train to London will ever have.”

Sunak said the economic case for HS2 – a project 14 years in the making, plagued by repeated delays and cost overruns – had “weakened significantly” as a result of changes in business travel in the wake of the pandemic.

But business and political leaders, including members of the ruling Conservative Party, strongly criticized the decision – which was leaked before the official announcement on Wednesday – as the latest example. Confounding policy making By the UK Government.

Andy Street, Birmingham’s Conservative mayor, said there had been a change It “damages” Britain’s international reputation, and as a “dangerous G7” country the UK had to be able to deliver “difficult” infrastructure projects.

He said in an interview with LBC radio this week that investors had already committed “hundreds of millions, if not billions, of pounds” on the “promise” of HS2. “You can’t then turn to those investors and say, ‘We’ve changed our mind.’”

One such investor is Tom Wagner, co-chairman of US private equity firm Knighthead Capital Management, which bought Birmingham City Football Club earlier this year.

in letter To a Sunak publication late last month, Wagner, now club chairman, said the improved connectivity with the rest of the UK that HS2 would bring was a “key” factor in Knighthead’s decision to invest in the club.

“The government is expected to honor its commitment to implement the long-term plans announced publicly,” he wrote. “Any deviation could lead to a loss of investor confidence, and this would have a significant negative impact on the UK. The ambitious HS2 project falls into this category.

The shift has also been criticized by Richard Walker, the head of the Icelandic supermarket chain, who until recently was a member of the Conservative Party.

Walker wrote in The Guardian that the government’s “apparent inability to deliver on major projects” is devastating to its credibility and business confidence. Sunday.

“The UK public company demands stability and certainty – and the current government’s constant changes in direction and failure to make decisions effectively undermine this.”

Walker added that he had canceled his membership in the Conservative Party.

-This is a developing story and will be updated.