HS2 ‘run worse than a parish council’ claims bidder in court battle

HS2 is run with less control than a parish council, a bidder has claimed in a legal row over an alleged conflict of interest that saw a £2.8 billion contract awarded to a rival, The Telegraph can reveal.

Global rail giant Siemens Mobility has taken HS2 to court over what it said were a series of conflicts of interest during the bidding for the deal to build trains that will serve the line, which is estimated will cost between £72 billion and £98 billion.

This includes allegations that one of the key members of HS2’s procurement team had “unregulated and unreported” contact with the staff members of the winning bidder.

Siemens is now claiming damages, including for loss of contract, which could cost the taxpayer millions.

It comes as the controversial project faced another crisis this week, with the Government forced to deny reports that plans for a central London terminal at Euston could be scrapped.

HS2 has been embroiled in a long-running and bitter legal battle surrounding the award of the lucrative rolling stock contract in 2021.

It is now the third legal challenge of the deal by a losing bidder.

At the centre of the case are claims that Tim Sterry, HS2’s head of rolling stock engineering, had maintained contact throughout the bidding with staff at the eventual winner, Bombardier.

HS2 has rejected these claims, stating that the procurement was lawful and the company’s governance was “well-thought-out and effective”.

In 2021, HS2 awarded the £2.8 billion contract to build the 56 trains to a joint venture between Hitachi and Alstom. The original joint venture (JV) was between Hitachi and Bombardier, but Alstom joined the JV in the late stages after it acquired Bombardier.

In the final day of hearing at the High Court last week, Fionnuala McCredie, KC, for Siemens, explained that Mr Sterry had a “decision-making” role in the eventual choice of Alstom/Hitachi for the contract.

But she alleged that this was “tainted in multiple respects” and claimed he had “acted in flagrant breach of HS2 policies” by having “unreported and unregulated” contact with Bombardier staff throughout the procurement.

Ms McCredie also alleged that these contacts with Bombardier went “unchecked” by HS2, and claimed that there was no evidence of Mr Sterry’s conflict of interest being discussed at the clients Conflict of Interest board.

This was one of two main allegations against Mr Sterry, with Siemens also raising concerns he did not disclose at any stage that he held interest in a pension with Bombardier. Siemens claims that this created a material conflict of interest.

In a statement summarising the case, Ms McCredie said: “HS2 is running one of the largest government infrastructure projects in the country.

“It does not even demonstrate the level of control required of a parish council, far less of a public body.”

In its defence, Sarah Hannaford, KC, on behalf of HS2, said the project’s procurement process “may not have been perfect, but it was lawful”.

She also accused Siemens counsel of using “hyperbole” and “exaggeration” in its claim.

A spokesperson for HS2 Ltd said it was confident the procurement was robust and lawful, with strict controls in place. It also pointed out that there were “multiple layers of assurance”, so no individual was able to unduly influence the result.

A Siemens Mobility spokesperson said: “We believe HS2 is vitally important for the future of the UK and want to play our part in delivering it, but believe there is a significant case to answer in the particular instance of our strong bid to build Britain’s new HS2 trains.”

Mrs Justice O’Farrell is expected to provide her written judgement in four to six weeks.