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Business frustrated over UK PM's silence on HS2 rail link

FILE PHOTO: HS2 high-speed rail line construction continues at Euston in London

MANCHESTER, England (Reuters) -Chief executives, business organisations and lawmakers from northern England were scratching their heads on Monday over when Prime Minister Rishi Sunak would announce a decision to scrap or delay the northern leg of Britain's HS2 high-speed rail project.

While most agreed Sunak had most probably decided to delay the stretch running from the central English city of Birmingham to Manchester, the northern English host of the governing Conservative Party's conference, they said they were puzzled, and frustrated over why it had not yet been announced.

A source from Sunak's Number 10 office said on Monday no final decision had been taken on HS2, a message government ministers have been repeating for weeks.

But business leaders and organisations in Manchester said they believed the writing was on the wall, with one boss, who declined to be identified, describing the probable scrapping or delaying of the northern leg as a "betrayal" by government.

HS2, or High Speed 2, was originally expected to link London with cities including Birmingham, Manchester and another northern English city of Leeds, but has already been scaled back. Business leaders say that every delay means the project gets more expensive.

"You will be turning your back on an opportunity to level up - a once in a generation opportunity. You will indeed be damaging our international reputation as a place to invest," said Andy Street, a Conservative elected mayor for the West Midlands region of England.

Government ministers have often said HS2, Europe's biggest infrastructure project, should be reviewed given spiralling costs, raising the prospect of its northern section being axed and prompting warnings from businesses over the need to invest.

Sunak, who is hoping to use his party's annual conference to revive his premiership and close the gap in opinion polls with the Labour Party before an election expected next year, has repeatedly said he is the man to take "tough decisions".

Scrapping the link to Manchester would reduce HS2 to a line between London and Birmingham. Work on this initial phase is already advanced.

Even before Britain's run of double digit inflation from late 2022 to early 2023, the HS2 budget had ballooned.

Its 2015 cost of 55.7 billion pounds ($68 billion) reached 98 billion pounds by 2019, and a 2020 review showed that could rise to 106 billion pounds.

($1 = 0.8234 pounds)

(Reporting by Elizabeth Piper and Kylie MacLellan; Editing by Christina Fincher)