Transport officials plot PFI-style deal to fund HS2 Euston station

Government officials are reportedly planning to raise at least £3bn from private sector investors to help fund the new HS2 station at Euston and renovate the neighbouring mainline terminus.

Senior officials at the Department for Transport are looking to revive a version of the controversial private finance initiative (PFI) that was expanded significantly under Tony Blair, according to The Times.

The Conservative government abolished PFIs for new infrastructure projects in 2018 following criticism that they failed to give the taxpayer value for money.

Roughly £52bn of total PFI contracts still exist, which involve private sector investors providing upfront funding for public sector projects.

Transport officials’ plans for Euston reportedly include the key features of PFI, and they are said to be pushing for Treasury clearance to announce a tender in which private investors would be offered a decades-long concession.

It was reported that private investors would inject at least £3bn and, in return, receive a payment for every passenger who passes through the barriers over a specified period.

It was said the government would contribute around £700m.

The scheme is reportedly at an early stage and would require the Treasury to approve public money being spent on building a 4.5-mile tunnel between Euston and Old Oak Common station in north-west London for HS2 services.

Transport Secretary Louise Haigh strongly signalled earlier this month that approval for Euston to be the HS2’s southern terminus would be announced soon. The tunnel is estimated to cost £1bn.

It was reported that a final decision on the PFI-style plan for Euston is unlikely to be reached before next spring’s spending review.

A government spokesperson commented: “We are reviewing the position we inherited on HS2 and will set out a plan in due course.”

The news comes after the Financial Times reported in August that Chancellor Rachel Reeves was considering a PFI-style deal to fund the £9bn Lower Thames Crossing road tunnel.