London’s troubled Crossrail scheme has been hit with yet another delay and cost overrun - this time between £400m and £650m could be added to the price.
The news will send shockwaves through Transport for London (TfL) as its already stretched finances will be hit by further lost revenue, which could run to hundreds of millions.
In a statement to the London Stock Exchange, publicly-owned Crossrail Limited (CRL) disclosed the latest projections show 'even higher levels of risk of £650m more than the funding committed under the Financing Package'.
'TfL and DfT are in discussion regarding how funding of these additional costs will be resolved,’ it said.
The funding envelope for the whole project, including Network Rail’s costs, is £17.8bn but the projected increase will take this beyond £18bn.
The lastest announcement pushes this deadline back as well, with a view to completing the project at some point in 2021.
Delays of the past
The central section of the scheme was originally due to open December 2018.
However during the summer of 2018 it emerged this date would be missed. The news quickly sparked rows over who knew what and when and led to the downfall of Sir Terry Morgan from both the Crossrail project and HS2.
Then in December 2018, TfL announced a new financing package provided by the Department for Transport (DfT), the Greater London Authority and itself to support the final stages of the project.
And earlier this year, CRL set a new timeline for the project stating it would be completed by spring 2020 - only for this to be pushed back by the latest announcement.
The statement adds: ‘The Elizabeth line will open as soon as practically possible in 2021. A more comprehensive update is expected early in 2020. In the meantime, any potential financial impacts to TfL's passenger revenues will be considered in TfL's 2019 update to its Business Plan.’
Counting the cost
In May, financial ratings agency Moody's predicted that the delays could cost TfL up to £1bn in lost revenue, although TfL will save on operating costs.
On this basis, the new delay could cost hundreds of millions of pounds, particularly if the scheme misses its new projected opening date of 2021.
CRL chief executive Mark Wild said: 'The Crossrail project has made good progress over recent months. A key focus during 2019 has been finalising the stations, tunnels, portals and shafts.
‘By the end of the year, Custom House, Farringdon and Tottenham Court Road stations will be complete and the project is on track to finish fit-out of the tunnels in January. The central section will be substantially complete by the end of the first quarter in 2020, except for Bond Street and Whitechapel stations where work will continue.’
He added: ‘The two critical paths for the project remain software development for the signalling and train systems, and the complex assurance and handover process for the railway; both involve safety certification for the Elizabeth line. These must be done to the highest quality standards to ensure reliability of the railway from day one of passenger service.’
A TfL spokesperson said: ‘The Crossrail team continues to make progress completing the outstanding work on stations and tunnels. They have also identified the need for more funding to complete the complex testing of trains and manage the handover of the railway safely and reliably into passenger service.
‘Full testing is due to get underway next year and there can be no shortcuts on this hugely complex project.’