Infrastructure Offers Alternative Income Stream

The UK Government has announced £6.6bn of contracts for the new High Speed 2 rail link this week - how can investors get a slice of the action?

Karen Kwok 19 July, 2017 | 3:44PM

This week the Government revealed the contractors who would be responsible to build the first phrase of HS2 – the new high speed railway between London and Birmingham. The initial contracts are worth a weighty £6.6 billion.

Shares in those winning contractors Carillion (CLLN), Costain (COST) and Balfour Beatty (BBY) rallied following the announcement, as investors looked to benefit from their participation in the HS2 construction. Carillion was up 20% at the end of the trading day on Monday, while Costain and Balfour Beatty ended 5.4% and 3.1% higher respectively.

This £56 billion HS2 rail networks project plans to connect London to Birmingham and to Manchester and Leeds. The first trains are not expected to run until 2026. Investors looking to profit from the completion have years to wait, and should steel themselves for disruption during construction that could cause the completion date to be delayed.

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About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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