Should Scottish Businesses take More HS2 Shares as They’re Being Encouraged?

As the High-Speed 2 (HS2) railway project continues to unfold, a significant question arises for Scottish businesses: should they seize more shares in this monumental infrastructure project? With £11.5 billion already allocated in contracts since 2016, yet only a fraction of this sum reaching Scottish companies, there’s a growing urge for these firms to step up and claim a larger piece of the pie.

The Current Landscape of HS2 Contracts

To date, Scottish businesses have lagged in securing HS2 contracts, with only 56 companies sharing £137 million worth of tier 2 contracts. That’s a stark contrast to regions like the West Midlands, South East, and East of England, each reaping over £1 billion.

This disparity brings to light a potential missed opportunity for Scottish firms in an expansive project that’s reshaping the UK’s transport infrastructure.

The Upcoming Surge of Opportunities

HS2 is not just a rail project; it’s a catalyst for growth across multiple sectors, including tech, digital, rail, and low-carbon industries. From 2024, HS2 will launch new contracts for supplying track, power, overhead catenary, telecoms, signalling, and mechanical and electrical fit-out. That marks a significant transition in the project’s phase and opens doors for businesses to contribute to numerous requirements.

The Materials and Costs Involved in HS2

HS2 has cost around £106 billion so far. That’s almost double the allotted budget. The construction of HS2 is a massive undertaking involving endless materials, technologies, and manpower. From precast retaining walls, essential for stabilising embankments and cuttings, to advanced signalling systems, the project demands a wide array of supplies.

Other materials include steel for track construction, electrical components for power systems, and telecom equipment for communication networks. The cost of these materials is substantial, representing a significant portion of HS2’s overall budget.

The Role of SMEs in HS2

Interestingly, 71% of Scottish firms involved in supplying HS2 are SMEs. That highlights the project’s potential in supporting small businesses, not just large corporations. For instance, Zappshelter, a Perthshire-based company, has successfully provided bespoke storage solutions at various HS2 sites. That indicates the diverse nature of opportunities available within the HS2 supply chain.

Why Should Scottish Firms Act Now?

HS2 offers Scottish businesses a chance to expand their horizons and diversify their portfolios. Engaging in such a high-profile project can elevate a company’s profile within the UK and internationally. However, to capitalise on these opportunities, firms need to act promptly. Registering on HS2’s supplier platform, CompeteFor is a crucial first step to gaining access to upcoming tenders.

The Economic Ripple Effect

Beyond direct contract gains, participating in HS2 can cause a ripple effect on the Scottish economy. It can stimulate job creation, foster innovation, and potentially lead to long-term partnerships and growth. Moreover, as HS2 progresses, the demand for various products and services will evolve, potentially benefiting a broader spectrum of businesses.

As HS2 transitions into its next phase, the call for Scottish businesses to take a more active role is loud and clear. The project presents a unique opportunity in terms of financial gain and in contributing to landmark infrastructure development.

For Scottish companies, especially SMEs, now is the time to step forward and play a part in shaping the future of UK rail transport. By embracing this opportunity, they can help drive Scotland’s economic growth and showcase their capabilities on a grand stage.