North East firms risk losing out on £50bn of supply chain opportunities associated with the development of high speed rail if they do not act soon.
That was the stark message from Alison Munro, director of development at HS2, as she visited the region to brief business leaders.
Mrs Munro revealed a map of firms who have so far registered their interest in becoming part of the supply chain for what promises to be the biggest construction and engineering project in Europe, in recent years.
Attendees from across the regional business spectrum were shocked to see the map showed nearly all firms registered to be South East or Midlands-based, and a significant lack of representation from the North East.
HS2 is expected to generate some £8bn of civil engineering work alone, with further supply chain opportunities in skills training and construction, among other disciplines.
The work is expected to create around 50,000 jobs, and Mrs Munro said that HS2 wants to retain as much of supply chain as possible within the UK.
Some contracts, including ground investigation works, have already been delegated and work has started. The vast majority of works will get underway in 2017, when phase one of the construction process is started - taking high speed line from London to Birmingham.
Details of the tendering process and timescales will be made available at HS2’s two forthcoming Supply Chain Conferences, being held in London on October 17, and Manchester on October 23.
Addressing the business contingent at Barlcays’ Newcastle offices yesterday, Mrs Munro implored North East firms to register their interest in the HS2 supply chain and attend the upcoming conferences to make sure they were in the running to benefit from the project.
She said: “There are tens of thousands of opportunities to business in the development of HS2. The problem here is not a shortage of work.
“We’ve seen Crossrail manage to retain 97% of its supply chain in the UK. Although HS2 is on a much bigger scale, we’re taking cues from similar projects to inform the way work is allocated.
“We recognise we need to continue to make the case in for HS2 in the North East, because it’s about much more than a high speed rail line. There has been some concern that HS2 will replace spending on the upgrading of existing rail infrastructure - this is most definitely not the case.”
Mrs Munro was challenged on a number of fronts from the North East leaders present including: how the contracts would be packaged so that regional suppliers could access and profitably carry them out; how HS2 would ensure SMEs were connected to the appropriate levels in the supply chain and given opportunity to add value through innovation; and how the region could contribute to the upskilling of the labour force needed for HS2.
Representatives from the professional services, manufacturing and training sectors all questioned Mrs Munro.
A report from HS2’s non executive chair Sir David Higgins, due to be published next month, is expected to provide some clues as to the viability of an east-west high speed rail link, joining the northern cities of England.
Chancellor George Osborne is also expected to make a more substantial announcement on the potential project in the Autumn Statement.