One of HS2\u2019s biggest contractors has warned the government that raising tariffs on foreign steel imports will \u201cexacerbate\u201d cost pressures for the UK construction industry, amid growing concern over the \u00a3100bn railway\u2019s rising budget.<\/p>\n
Ministers said last week they would double the tariffs on imported steel and slash the amount that can be bought from overseas, in an attempt to save Britain\u2019s struggling steelmakers.<\/p>\n
However, the move will also raise the cost of the metal, crucial for infrastructure projects such as HS2, at a time when an energy shock from the Iran war is already inflating steel and concrete prices.<\/p>\n
Mark Reynolds, the chair of the construction company Mace, said that amid the rising energy costs and an already depressed construction sector, the tariffs were \u201cill-timed and unhelpful and will only exacerbate the challenges\u201d facing the UK industry.<\/p>\n
Heidi Alexander, the transport secretary, is due to update the Commons on Monday on Labour\u2019s drive to \u201creset\u201d the cost of HS2 amid concern over its rising price tag. She is expected to say she has asked HS2\u2019s chief executive, Mark Wild, to explore reducing the speed of its trains to save money.<\/p>\n
A government source said Alexander was \u201cweighing up all options to claw back as much time and money for the taxpayer as possible\u201d with the aim to open the railway as soon as possible and at the lowest possible cost.<\/p>\n
Mace is building stations at London Euston and Birmingham Curzon Street for HS2, the stalling rail project that is already expected to cost about \u00a3100bn when accounting for inflation. Last year its boss told ministers that a deadline<\/a> of opening the line in 2033 could not be met.<\/p>\n Contractors are understood to have already bought much of the steel that goes into the tunnels, viaducts, bridges and underground work that will support the railway. Now they are being told to look for opportunities to buy in advance for other elements such as stations, to mitigate against future price increases.<\/p>\n From July, quotas on importing many overseas steel products<\/a> will be slashed by 60%, and duties outside those quotas will be raised to 50%. The measures bring the UK in line with recent moves by the US, the EU<\/a> and Canada in response to a surfeit of cheap imports from China, which is by far the world\u2019s largest producer.<\/p>\n \u201cWe have to be honest that tariffs on imported steel will hit infrastructure projects with a cost shock,\u201d said Milda Manomaityte, the chief executive of the Association for Consultancy and Engineering. That would be \u201cfelt sharply\u201d on bridges, railways and new tram lines, she added.<\/p>\n Even before the Iran war sent energy prices soaring, the construction industry was trying to bounce back from its worst run since the financial crisis<\/a> almost two decades ago.<\/p>\n The tariffs were \u201creally unhelpful to the construction market and to the economy at the moment\u201d, said Paul Gandy, the former boss of Tilbury Douglas, a construction company specialising in public projects.<\/p>\n \u201cA lot of this steel is going to go into public sector work,\u201d added Gandy, now the president of the Chartered Institute of Building. Many of those schemes were already \u201cnot a pretty picture\u201d when it comes to spending.<\/p>\n