The engineering firm handed a £170 million deal last month to develop Phase 2b of HS2 has announced it is pulling out of that section of the project, amid alleged conflicts of interest.
CH2M was chosen by HS2 Ltd last month to deliver two stretches of the high speed rail line, from Crewe to Manchester and from Birmingham to Leeds.
But the contract signing was delayed as officials were reportedly investigating concerns from rival bidder Mace that there may have been conflicts of interest.
American-based firm CH2M has been involved with HS2 Ltd since 2012 and has been awarded a £350 million deal to develop Phase 1 of the line from London to Birmingham.
Mark Thurston, HS2 Ltd’s new chief executive, is a former CH2M employee, as was his temporary predecessor Roy Hill.
A CH2M spokesman said: “The protracted delays and ongoing speculation risk further delays to this critical national infrastructure, thereby increasing costs to UK taxpayers, as well as to the firm.
“CH2M remain fully committed to working with HS2 Ltd on delivering Phase 1 on time and within budget.”
The spokesman added: “CH2M has demonstrated all appropriate measures taken throughout to ensure the integrity of the procurement process.”
The firm’s chief executive Jacqueline Hinman wrote to HS2 Ltd chairman Sir David Higgins to “formally advise him of their withdrawal of interest” in the Phase 2b development partner contract.
Phase 1 of the £55.7 billion HS2 scheme is scheduled to open in December 2026, with a second Y-shaped phase launching in two stages.
Phase 2a from the West Midlands to Crewe will open in 2027 and Phase 2b, from Crewe to Manchester and from the West Midlands to Leeds, South Yorkshire and the East Midlands, will begin operation in 2033.
Legislation for Phase 1 passed its final hurdle in Parliament in January and construction work is set to begin in the coming weeks.
When the section is open it is expected to nearly triple the number of rush-hour seats on the route from 11,000 to about 30,000.
Most intercity trains will run on the HS2 network, allowing more commuter services on the West Coast line.
Opponents of the project claim it will create havoc during construction and have disastrous environmental consequences.
An HS2 Ltd spokesman said: “As they have announced, CH2M have decided to withdraw from the Phase 2 Design Partnership bid process, a decision which we welcome.”