Cemex awarded £30m over HS2-enforced factory closure

The High Court has ordered the government to pay cement and concrete supplier Cemex UK almost £30m in compensation after compulsorily buying its Birmingham factory to make way for HS2.

The transport secretary acquired the materials’ firm’s Washwood Heath businesses in Birmingham in 2020 as the land was needed as a control centre for the megaproject.

Operations at Cemex’s site included a factory for the manufacture of railway sleepers, an asphalt plant and an aggregate supply business.

But the compulsory purchase order forced it to move all three business activities to different locations.

Despite the transport secretary and Cemex agreeing terms for two of the three activities they could not agree over the railway sleeper facility, which took Cemex two years to move to what it described as an inferior location in Rochester, Kent, the High Court heard.

The dispute led the Midlands-based firm to take the government to court over the amount of compensation offered to it.

Cemex initially sought just over £59m in compensation for the move.

However, the government argued the firm had actually made a gain of £4.5m due to a downturn in the market for railway sleepers, London’s High Court heard.

At a court hearing in September, Cemex’s representatives reduced its estimated loss to £30.5m and those representing the transport secretary accepted it had made a loss, but put the figure at £10.4m.

Now, Judges Elizabeth Cooke and Peter D McCrea have found in Cemex’s favour and ordered the government to pay £29.9m.

Cemex was entitled to money for the value of the land, relocation costs, loss of profit, professional fees and other costs under the terms of the compulsory purchase order, the judges found.

Cemex said the Washwood Heath site was ideal as it was close to the West Coast Mainline and was described as having a favoured position in the market due to its efficiency, flexibility and expertise.

In an interim decision in May, the court ruled that the Rochester factory had “limited capacity which may become a problem when [Network Rail’s] requirement recovers from its current low level”.

Judges added that the future of Cemex’s business would be “hard to predict”.

In their final judgement, the judges said the costs took into account projected future specialist sleeper demand and ongoing sales to Transport for London.

Judge Cooke said they were “dismay[ed]” the parties had not been able to make agreements between themselves on costs and had given “so little reason” on why they had not.

The case, they said, was “long and extremely complicated” and featured “subject matter bordering on impenetrable”.