HS2 begins audit of firms following revelations about oligarch with stake in tunnelling contractor

A full review of major HS2 contracts is being undertaken to ensure sanctioned businesspeople do not profit from the project in the wake of revelations a Russian oligarch owned a substantial stake in a firm carrying out work on the project.

Last week, Austrian civil engineering giant Strabag, which working on the new high speed network near London, suspended dividend payments to a business owned by industrialist Oleg Deripaska who was sanctioned by the UK government earlier this month.

Building understands that HS2 Ltd is now reviewing its tier one and critical tier two contracts, as well as liaising with parent organisations within each joint venture on the project, to ensure no other sanctioned individuals are in receipt of UK taxpayers’ money.

Deripaska’s company Rasperia Trading Ltd owns 28% of Strabag which is – along with Costain and Skanska – part of the SCS joint venture carrying out HS2 work near London.

Following the invasion of Ukraine, the Russian businessman’s UK assets were frozen by the government, which described him as “a prominent Russian businessman and pro-Kremlin oligarch. Deripaska is closely associated with the Government of Russia and Vladimir Putin.”

Liberal Democrat MP Sarah Green wrote to HS2’s chief executive, Mark Thurston, as well as transport secretary Grant Shapps, demanding the contract with Strabag be terminated.

The MP, whose Chesham and Amersham constituency lies in the path of HS2, also called for a “thorough audit of the stakeholders in all companies contracted to work on publicly funded projects”.

The tunnelling firm subsequently moved to distance itself from Deripaska with its core shareholder, the Haselsteiner Family Private Foundation, terminating its syndicate agreement with Rasperia Trading Ltd, after saying attempts to buy its stake in the company had failed.

Green told Building that Ruth Todd, chief commercial officer of HS2 Ltd, had reassured her that Deripaska would no longer benefit directly from HS2 funds.

But she said she was still waiting to hear from Shapps. “Like many others, my central concern remains that sanctioned individuals and organisations cease to profit from taxpayer money,” she added.

A Cabinet Office spokesperson said all options were being explored on how ties could be further cut with companies that “prop up the Russian regime”.

“It is of the utmost importance we explore every possible avenue to ensure British taxpayers’ money isn’t funding Putin’s war machine,” he said.

“We’re working closely with strategic suppliers to ensure companies with public contracts comply with the financial and investment restrictions on Russia.”

Strabag is working as part of SCS on two huge civils jobs for HS2, the £900m Euston Tunnels & Approaches job (S1) and the £1.4bn Northolt Tunnels job (S2). 

Strabag is building a factory in Hartlepool to make 36,000 precast concrete segments for the tunnels. The site at an old oil rig fabrication yard was visited by HS2 minister Andrew Stephenson last autumn.