HS2 offers major new target for UK ICT suppliers, says GlobalData

High Speed 2 (HS2) is establishing itself as a major new opportunity for ICT suppliers in the public sector transportation space, with contract awards already totalling £22.8m this year and over £1bn in tenders and pre-tenders up for grabs in the near term. The scale of HS2’s procurement looks set to position it as the fourth highest spending transport body in the UK in terms of ICT, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report, ‘HS2 Ltd: Organisation Overview’, notes that only Network Rail, Highways England and Transport for London (TfL) will exceed its annual spend, at around £800m, £220m and £415m per year, respectively.

Tony Cripps, Principal Analyst for UK Transportation and Smart Cities at GlobalData, comments: “Major new transportation-related ICT opportunities do not come along all that regularly in the UK so the full flourishing of HS2 is a significant event for technology suppliers. Until recently, HS2 Ltd – the executive non-departmental public body set up in 2009 to deliver the new North-South high-speed railway – has offered limited opportunities to ICT suppliers. Unsurprisingly, the scale of this procurement has grown rapidly since 11th February when Prime Minister Boris Johnson finally gave the green light to the project.”

GlobalData has recorded 28 ICT contract awards made by HS2 Ltd between January and the end of June 2020, for a total estimated value of £22.8m. These include multi-million pound IT infrastructure support contracts with managed services providers Littlefish and MCSA Group, as well as contracts for Microsoft Dynamics ERP / CRM and Azure cloud computing service with Tisski and Trustmarque Solutions.

This trend is continuing – among HS2’s new procurements is a £540m, 30-year engagement published in May to deliver a command and control and traffic management system for the entire railway. This was joined in late June by a £305m, 18-year tender to deliver telecoms networks and services for the entire railway. In addition, additional ICT tenders worth between £175m and £505m have also been confirmed and more can be expected to follow.

“Contracts such as these are most likely to go to suppliers already deeply entrenched in UK transportation communications networks,” says Cripps. “However, considerable opportunities should follow on for network equipment providers and other ICT providers.”

As HS2 is leveraging a number of Crown Commercial Service (CCS) frameworks, inclusion on those frameworks should be considered a necessary pre-requisite for suppliers, although numerous other ICT-related procurements not tied to CCS frameworks are already scheduled.

While some doubt has been cast over the need for the new railway in light of the changes in transport usage resulting from the COVID-19 pandemic, HS2 is widely perceived as essential for relieving pressure across the entire GB rail network, as well as a key component in the Government’s strategy for decarbonising transport. As such, there is currently little expectation that the project will be put back on ice, either temporarily or permanently.

Cripps adds: “Overall, HS2 represents a major new opportunity for ICT suppliers of many shapes and sizes for many years to come as well as providing a considerable boost for the UK public sector transport industry as a whole.”

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