Transport for London (TfL) will borrow up to £825m from the Department for Transport to cover the ongoing financial shortfalls for its beleaguered Crossrail project.
TfL had recently warned it faced the nightmare scenario of mothballing the scheme, which is billions over budget and years late, and still yet to open fully.
The Government agreed a £14.8bn funding package for the line, which runs under central London and was due to open in late 2018. The project is now set to cost over £19bn and is not scheduled to be delivered until 2022.
The Mayor of London, TfL, the Department for Transport (DfT) and HM Treasury have now agreed a funding and financing package for the final phase of the Crossrail project, which will be called the Elizabeth Line.
The Greater London Authority plans to repay this loan from Business Rate Supplement (BRS) and Mayoral Community Infrastructure Levy (MCIL) revenues. Mayor of London, Sadiq Khan, said: 'Securing this financing package enables us to press full steam ahead with getting the central section of the Elizabeth line open as soon as possible.
'The Government have insisted London must pay the shortfall – despite the overwhelming majority of the tax income that will result from Crossrail going to the Treasury. This is another example of London supporting the country way over and above the help we get from this Government. I do not want this project to be stalled so it is vital that we dig deep to get the railway up and running.'
As Transport Network reported, the Government's National Infrastructure Strategy said it would finance the remainder of the Crossrail project; however, the DfT refused.
Mark Wild, chief executive, Crossrail Ltd, said: 'Delivery of the Elizabeth line is now in its complex final stages. Good progress continues to be made with completing the remaining infrastructure works so that we begin intensive operational testing, known as Trial Running, at the earliest opportunity in 2021.
'Many of the stations are now nearing completion and we will shortly commence an enabling phase for Trial Running which allows testing in the tunnels to be undertaken with an increased number of trains, further helping to build operational reliability. We are doing everything possible to deliver the Elizabeth line as safely and quickly as we can.'
Governance of Crossrail transferred directly to TfL in October. The project remains jointly sponsored by TfL and the DfT.
When fully open, the Elizabeth line will increase central London's rail capacity by 10%, able to carry more than half a million passengers per day and will support new journeys through central London out to Essex and Berkshire.