Crossrail rescue cash pushes costs close to £18bn

 

Ministers and London mayor Sadiq Khan have agreed a £1.4bn financing package to complete Crossrail, which is now predicted to cost at least £17.6bn.

Update: in a subsequent statement, Transport for London said that 'an Autumn 2019 opening date could no longer be committed to at this stage'. 

For the most part, the cash comes in the form of a £1.3bn loan from the Government to Transport for London (TfL), via the Greater London Authority (GLA). The GLA will be responsible for financing the loan. 

In a statement to MPs, rail minister Andrew Jones noted that Crossrail Ltd, ‘a wholly owned subsidiary of TfL’, had announced in August that the opening of the line would be delayed until ‘autumn’ next year. This date is in doubt according to reports, although no new date has been given for completion.

”Local

He said: ‘The Government remains committed to the rapid completion of the project, in a way that is fair to UK taxpayers, and that enables London - as the primary beneficiary of Crossrail – to bear the additional costs.

Mr Khan said: ‘It’s so crucial we have secured this funding agreement with the Government - who are joint sponsors of the project - that will allow Crossrail Ltd to get the railway up and running.’

Mr Jones said the emerging findings of reviews by KPMG into Crossrail Ltd’s finances ‘indicate the likely range of additional capital cost due to the delayed opening of the central section could be in the region of between £1.6bn and £2bn, a figure that includes the £300m already contributed by the Department for Transport (DfT) and TfL in July 2018.

With the previous budget of £15.9bn, including rolling stock, this left between £1.3bn and £1.7bn to cover the predicted additional costs of the project.

Mr Jones said: 'The GLA intend to repay the loan via London’s Business Rate Supplement (BRS) and from the Mayoral Community Infrastructure Levy (MCIL).

The GLA will also provide a £100m cash contribution, ‘taking its total contribution for this package to £1.4bn’.

He added that as the final costs of the project remain unconfirmed, a contingency arrangement could see the DfT loan TfL up to £750m more in the event that further finance is required.

Mr Jones said the overall funding envelope for the project is now £17.6bn, a figure that appears to exclude this possible further loan.

He added that new Crossrail CEO Mark Wild is conducting an extensive review of the remainder of the programme ‘and will provide clarity in the new year on the opening date of future phases’, which ‘will also provide greater clarity on the level of additional funding required’.

The DfT and TfL have recommended to the Crossrail Ltd board that it should appoint Tony Meggs previously chief executive of the Infrastructure and Projects Authority, as chair.

Ministers have also agreed TfL’s nomination of former MP and minister for London Nick Raynsford as deputy chair.

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