Phasing issues put Crossrail construction £190m over expected cost

Construction costs on the Crossrail programme have come in 20% over the planned costs, amounting to around £190m of extra spending on the year to date.

The difference in cost has been attributed in part to the phasing of certain works, with construction on certain sections of the line completed in periods which were not initially planned.

TfL bosses revealed the issue in the latest board papers for their Finance Committee, which labelled delays at Whitechapel and Farringdon stations as factors which had driven up costs in the last year.

In addition, the capital’s transport body said it had been required to make system-wide changes in design and employ new high-level staff, causing an added rise in expenditure.

But Crossrail officials defended the extra spending, explaining that coming in over cost for this particular year would not push the project past its £14.8bn total budget.

This was confirmed by TfL in its report: “Crossrail construction costs are £190m (20%) ahead of budget, but the Elizabeth Line is still forecast to be delivered within its overall funding.

“Period variances are expected as the budget contains a number of assumptions about the timing and scope of work.”

A spokesperson for Crossrail told RTM that the numbers for expected costs were based on a business plan completed by the company in September 2016.

“The Elizabeth Line is being delivered within its available funding,” they added.

“The TfL finance report refers to Crossrail’s actual expenditure compared to forecast expenditure as estimated in the Crossrail Business Plan. Variances are expected as the business plan contains a number of forecast assumptions dating from September 2016, such as the timing and scope of work to be delivered in 2017-18.”

Both Woolwich and Bond Street stations have also come in behind scheduled opening times, with the £300m Bond Street revamp opening in November last year.

RTM reported in January that the Elizabeth Line could be under some time pressure after electrical testing works scheduled for November had been pushed back due to an explosion.

A voltage transformer meant to connect some of TfL’s equipment with Network Rail’s failed and exploded, meaning the testing – which was necessary to begin energisation on some sections of the line – could not be completed.

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Lutz   26/02/2018 at 16:06

Has it not already been confirmed that Crossrail will come in over budget and late?

Noam Bleicher   27/02/2018 at 08:18

Yes it has Lutz. The whole article could be summarised in the sentence 'The project has gone over budget due to late delivery largely caused by a transformer explosion'. Let's bear in mind however that the overspend is a little over 1% of the total project and will have been forgotten in a few months once the service is operating.

Ian Watkins   27/02/2018 at 13:08

That doesn't seem to tie in with this in the article: But Crossrail officials defended the extra spending, explaining that coming in over cost for this particular year would not push the project past its £14.8bn total budget.

Lutz   27/02/2018 at 13:26

@Noam Bleicher:- The impact of the issues around the transformer may be small, but the total cost of the #Crossrail project is now being quoted at near to 50% more than the figure we have been quoted through-out the construction. The figure is adjusted for inflation, but that does not justify the 50% increase. This pertinent because we are now looking at funding for #CR2; That is a GBP 36 bn (GBP 34 bn if you look at non-TfL figures - possibly pending a discussion on cost-cutting) in 2015 currency base. More than half the funding has to come from the #London economy, yet the project has not been fully costed. We have also been seeing a decline in patronage on the national routes and in tube services in contradiction of the current estimates of future demand. So there is a growing risk that London will be burdened with two white elephants were revenues do not meet expectations and costs are much higher than originally claimed they would be.

Lutz   27/02/2018 at 13:33

Ian Watkins:- The budget was GBP 10 bn - the near 50% increase in the figure is not justified by inflation alone. There will be variances in the level of expenditure across a project time-line due tactical adjustments delivery of individual tasks, but we already know that the project will buts it's budget when we have been assured all along that it would not because of adequate financial capacity within the allocated budget.

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