10.12.18
Crossrail given £1.4bn bailout as launch date pushed back once again
Crossrail has suffered further delays to its schedule beyond the autumn of 2019 and London transport bosses have today announced a £1.4bn bailout of the flagship project – even worse than first estimates – in what represents yet another blow for the troubled scheme.
A day after the £15.4bn project was due to open according to its original schedule, TfL confirmed a new financing agreement for the Elizabeth Line which will see the Greater London Authority (GLA) borrow up to £1.3bn from the DfT.
On top of a £100m contribution from GLA, a £750m loan will be given to Crossrail by the DfT as a contingency, replacing the original £350m package offered by the government in October. An investigation has found, however, that between £1.6bn and £2bn is needed to see off the project.
Crossrail’s new CEO, Mark Wild, has today announced that core elements of the infrastructure including stations and tunnels are yet to be completed and that, following a review, it has become clear that the already-delayed launch date of autumn 2019 cannot be committed to at this stage.
It has also been announced that Tony Meggs has been nominated by the mayor of London and transport secretary as the new chair of Crossrail. He will replace Sir Terry Morgan if ratified.
Meggs will step down from his role as CEO of the Infrastructure and Projects Authority and oversee the final stages of delivering the Crossrail project, along with the help of Nick Raynsford MP, who has been nominated as deputy chair.
A review by KPMG, which was appointed to investigate Crossrail’s spiralling costs and the delays, indicated that the capital impact of the August delay will be in the region of £1.6bn and £2bn, which it now seems London will be picking up the bill for.
Today’s announcement means the final bill for the Elizabeth Line could reach £17.6bn, and this is now the third rescue plan announced this year.
Sadiq Khan, who has been at the centre of the delay’s controversy, commented: “I haven’t hidden my anger and frustration about the Crossrail project being delayed. This has a knock-on consequence of significant additional cost to the project. It has been increasingly clear that the previous Crossrail Ltd leadership painted a far too optimistic picture of the project’s status.”
The mayor added that he is confident that, working with TfL and the government, the new leadership “can get the job done.”
Mike Brown, London’s transport commissioner, also noted: “Crossrail Ltd’s announcement of the delay to the Elizabeth line is extremely disappointing and, only now, is the scale of what is yet to be completed becoming clear.
“The confirmation of this funding agreement will now allow Crossrail Ltd and its new leadership to focus on finishing the remaining construction work on the stations and tunnels and then completing the vital safety testing in order to open the railway for passengers as quickly as possible.”