Crossrail could need even more bailout cash as Khan lashes out at ‘unfit’ governance

The capital’s mayor, Sadiq Khan, has revealed that the delayed and financially troubled Crossrail project will need even more cash injections in a move the London Assembly claim could have “calamitous” consequences.

In a letter sent to the head of the National Audit Office, seen by the Financial Times, the mayor said that on top of the £650m already handed to the project in recent months, Crossrail will need a further bailout.

“While I agreed £300m additional funding with the government on that basis, we now know that the scale of the issues faced was in fact much greater,” Khan said.

In late October, the government also handed Crossrail a £350m short-term loan in order to prevent it from falling further behind schedule.

In his letter, Khan also voiced “significant concerns” over the project’s transparency and claimed that its governance was “no longer fit for purpose.”

He has commissioned two reviews, one into governance and another into cost, both of which will conclude shortly. The NAO is carrying out its own review as per the Public Accounts Committee’s request.

Responding to the leaked letter, Gareth Bacon, chairman of the London Assembly Budget and Performance Committee, argued that the scheme is “floundering financially due to what seems to be incompetent management” and called on Khan to “get a grip” on the matter.

“It is troubling that the mayor is attempting to indicate that he has lost faith in the project management, as implied by his announcement of two reviews into Crossrail’s governance and cost,” continued Bacon. “Crossrail Ltd is a wholly owned subsidiary of TfL and TfL is run by the mayor. Someone needs to sort out the mess urgently.”

The chairman stressed that government has a shared responsibility for this project, making it vital that an agreement is reached quickly on how to fund and deliver the Elizabeth Line. But if this means the DfT has to step in and take back control of the scheme, that would be “a calamitous outcome” for both TfL and the mayor, argued Bacon.

Khan has been under fire in recent months over claims that he deliberately misled the London Assembly about Crossrail’s delay – which pushed back the project completion date from December this year to autumn 2019. He has repeatedly denied this, but could nevertheless face a formal investigation by the FCA if the watchdog deems it necessary.

Most recently, the London Assembly concluded that the delay could mount up £200m in lost TfL revenue.

(c. Stefan Rousseau, PA Wire)


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