Awards, contracts & appointments

03.05.19

Crossrail clung to ‘unrealistic’ timeline as contract renegotiations cost an extra £2.5bn, NAO reports

Crossrail “clung to an unrealistic view” throughout its delivery and has damaged public value, but is now “past the point of no return” and must focus on meeting its new target, a report from the National Audit Office (NAO) has said.

Whitehall’s spending watchdog said it is impossible to determine the overall value for money for taxpayers until Crossrail is completed, which transport bosses revealed last week would be between October 2020 and March 2021.

Following up on a damning report from the Public Accounts Committee (PAC), the NAO has further identified how the flagship programme descended into difficulty which has so far led to £2.8bn of additional ‘bailout’ financing and a two-year delay.

A compressed schedule, the loss of downward pressure on costs, and the absence of an achievable plan set against a “can do” attitude made the delivery plan, which was dominated by a competition date of December 2018, unrealistic.

The NAO said the delivery approach, delays to contracts, and the decision to set and stick to the original opening date had increased risks, and there was a large gap in Crossrail’s understanding of these delivery risks.

Changes required to the design and to contractors’ delivery schedules increased costs on most of the 36 main contracts, which resulted in increased costs of around £2.5bn between 2013 and 2018.

Pressure has continued to escalate through the end of 2018, with the forecasted final cost of the contract to install track and key tunnel systems increased by 80%, and the NAO said Crossrail made several decisions which drove unnecessary costs.

But the report stated that with nearly £16bn already spent, trains ordered and tunnelling long since completed, Crossrail is “past the point of no return” and must now focus on meeting its new targets.

Amyas Morse, the head of the NAO, said today: “Throughout delivery, and even as pressures mounted, Crossrail Ltd clung to the unrealistic view that it could complete the programme to the original timetable, which has had damaging consequences.

“DfT and TfL must support the new Crossrail Ltd executive team to get the railway built without unrealistic cost or time expectations.

“While we cannot make an overall assessment of value for money until Crossrail is complete, there have been a number of choices made in the course of this project that have clearly damaged public value.”

Crossrail chief executive Mark Wild commented: “We take the views of the National Audit Office very seriously and will be reviewing their recommendations carefully.

“I share the frustration of Londoners that the huge benefits of the Elizabeth Line are not yet with us. A new leadership team and enhanced governance structure has been put in place to strengthen the Crossrail programme and put the project back on track.”

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