CH2M backs out of HS2 phase two contract

Engineering company CH2M has pulled out of a £170m development partner contract to deliver the high speed rail line from Crewe to Manchester, with underbidder Mace calling for a rerun of the procurement process.

CH2M, which is already delivering phase one on behalf of HS2, was selected as Phase 2b development partner in January.

However, the appointment raised eyebrows across the construction industry, as the announcement came two weeks after HS2 selected CH2M’s European managing director Mark Thurston to be its new chief executive. Thurston will take over from interim chief executive Roy Hill in the spring. Hill was also on secondment from CH2M.

The contract with CH2M was set to be signed in February, but was postponed to allow HS2 bosses to meet with representatives from Mace, which lost out to CH2M, to discuss their concerns.

A spokesperson for CH2M said: “CH2M today provided formal notice to HS2 that we are withdrawing our interest in the HS2 Phase 2b contract.

“CH2M has 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 which could ultimately lead to increasing costs to UK taxpayers, as well as to our firm.

“CH2M’s reputation reflects excellence earned by placing the interests of our clients and communities first, best exemplified by our delivery of vital programmes like Crossrail, the London 2012 Olympics, the most sustainable to-date; HS2 Phase 1; and the Thames Tideway and Lee Tunnels.”

Another meeting between HS2 and Mace is set to take place tomorrow.

A spokesperson from Mace said: “After many weeks of waiting, we look forward to seeing HS2 tomorrow to finally hear their answers to our numerous questions about how the entire procurement process has been conducted. It’s important to note that conflicts of interest was only ever one element of our concerns. With so many questions being asked by the public and parliament, the only sensible thing to do now is to look at the whole tender process again.

“In our 26 year history, working on some of the UK’s most iconic projects, we have never brought a case to the High Court or seen a procurement process run like this. We continue to closely review our next steps with our legal team and don’t rule anything out.”

A spokesperson for HS2 said: “As they have announced, CH2M have decided to withdraw from the Phase 2b development partner bid process, a decision which we welcome.”

Bechtel is rumoured to be lined up to take over the contract from CH2M. Bechtel declined to comment when contacted by Place North West.

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