Steel Tariffs Threaten High-Speed Two Project

High-Speed Two Rail Project Faces Steel Tariff Challenges: Contractors Warn of Worsening Cost Pressures

A major contractor on Britains High-Speed Two rail project has expressed concern over the governments plan to double tariffs on imported steel, which could exacerbate cost pressures for the construction industry. The project, valued at £100 billion, is already grappling with budget overruns, and the new tariffs aim to protect UK steelmakers by reducing import quotas by 60% and increasing duties to 50% from July.

The timing of these changes is unfortunate, as energy prices are surging due to the Iran conflict, driving up costs for steel and concrete in major infrastructure projects. Industry leaders have criticized the move, warning that it will deliver a significant cost shock to projects like bridges, railways, and trams, which are still recovering from their toughest period since the financial crisis nearly two decades ago.

Transport Secretary Heidi Alexander is set to update parliament tomorrow on efforts to control High-Speed Two expenses, including considering slower train speeds to save money. Contractors have already secured most steel for tunnels and viaducts and are stocking up for stations to avoid future hikes.

Government sources say they are exploring all options to deliver the line quickly and affordably for taxpayers, while High-Speed Two reports using two-thirds UK steel this year. Officials plan a policy review in twelve months to assess its impact and promote less reliance on overseas supplies.

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