LONDON (Reuters) - Britain's HS2 high-speed rail project linking London with Birmingham in central England could cost the government up to 10 billion pounds ($12.70 billion) more than expected, the project's chairman said.
HS2 Ltd Chairman Jon Thompson said the cost estimate for the first phase of the line was 49-57 billion pounds at 2019 prices, but measuring in current prices would push it up by 8-10 billion pounds.
He said the cost increase was due to inflation and because the initial budget was set too low.
The infrastructure project, the first new intercity railway to be built north of London in over a century, has already been scaled back due to ballooning costs, with Prime Minister Rishi Sunak cancelling the northern leg to Manchester last October.
"If you brought our estimate for 2019 prices up to 2023-24 prices, you'd be adding somewhere between eight and 10 billion pounds further to that," Thompson told a committee of lawmakers on Wednesday.
In November, the government said HS2 Ltd's 49-57 billion pounds estimate was too high and asked Thompson to review it to account for the cancellation of the northern leg of the project.
But while Thompson acknowledged "some poor delivery on our part" for the higher cost estimate on Wednesday, he said the budget was too low to begin with.
"The cost of delivery is more than the government budgeted, and that is before you begin to account for the extraordinary construction inflation over the last three years or so," he said.
($1 = 0.7859 pounds)