Moody's: Crossrail delay to cost £400m in lost revenue in 2021

 

Analysis by Moody's, the financial services giant, has added to the growing chorus of concern over Transport for London's (TfL) financial situation.

Moody's Public Sector Europe echoed earlier analysis suggesting that the fiscal impact of the Crossrail delay will be 'significant over the medium term'.

TfL is facing budgetary pressures including the loss of its general operating grant, a freeze on fare increases and reduced passenger numbers in London.

In recent weeks transport secretary Chris Grayling and London politicians have all commented on what has been called the 'perilous' financial situation the authority faces.

The report states: 'TfL is currently generating a net operating deficit (including capital renewals and financing costs), because of the reduction in grant revenue, the ramp up of its cost cutting programme and the staged opening of the Elizabeth line. The deficit was forecast to be around £677m in fiscal 20181, and is projected to increase to £968m in fiscal 2019.

'TfL plans to cut annual operating costs by £1.2bn by fiscal 2023. Although it had initially expected to return to an operating surplus in fiscal 2022 as a result of the cost cutting programme, this date will now likely be pushed forward because of costs associated with the Crossrail delay.'

Moody's estimated the impact of the Crossrail delay on planned passenger revenue and suggested there will be a shortfall of around £200m in fiscal 2020, in line with recent estimates published by the London Assembly, and a shortfall of £400m in fiscal 2021.'

It also found that TfL 'is now more reliant on its operational performance to fund its activities than in the past as the revenue it receives through grants has declined to 18% of total operating income in fiscal year 2018 from 29% in fiscal year 2014'.

'Crossrail's delayed opening is one of a number of budgetary challenges that Transport for London is facing,' said Zoe Jankel, a Moody's vice president -- senior analyst and co-author of the report.

'We expect that the most significant impact of the Crossrail delay will be in the 2021 fiscal year, with a revenue shortfall of around £400m and a loss of operating surplus.

'Overall, we expect that TfL will be able to manage the impact of the delay using its available resources and spending flexibility. However, this will weaken its ability to cope with any other unforeseen costs or revenue shortfalls.'

Moody's stated that the fare freeze, introduced by London Mayor Sadiq Khan in 2016, affects around 50% of TfL's passenger income and will remain in place until 2020. TfL's passenger numbers, a leading indicator of the health of London's economy, fell by 1% in fiscal 2018 on an annual basis.

Despite the delay, Crossrail remains critical for TfL, with the new line boosting the capacity of London's railway network by 10% and bringing an additional 1.5 million people to within 45 minutes of central London.

The Elizabeth Line as it will be called is likely to contribute 14% of TfL's passenger revenue by 2023 and 12% of its total operating revenue.

Register now for full access


Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

 
comments powered by Disqus
 
 
highways jobs

Director, Governance and Improvement

City of York Council
£85-95k plus relocation package
We are looking for an exceptional individual to be appointed to the position of Director of Governance and Improvement. York, North Yorkshire
Recuriter: City of York Council

Senior Team Leader

Redbridge London Borough Council
£35,992 to £38,994 per annum inclusive
Looking for individuals with initiative, evidence of experience in managing a street cleansing service and motivating... Redbridge, London (Greater)
Recuriter: Redbridge London Borough Council

Road Safety Engineer

Cambridgeshire County Council
£21,589 - £31,371
We are looking for a candidate who can participate in developing and delivering technically sound highway engineering solutions. Cambridgeshire
Recuriter: Cambridgeshire County Council

Information Management Officer x 2 Jobs

Kirklees Metropolitan Council
£24,799 - £26,317
Looking for better and smarter ways to operate and you will play a key role working across a broad range of service... Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Graduate Engineer

Sandwell Metropolitan Borough Council
£24,313 - £28,785 per annum
This is an exciting new opportunity in the Highway Services team to play a pivotal role in creating a safe and... Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Chief Fire Officer

West Sussex County Council
Competitive Salary plus Financial Support for Recruitment and Retention
We are looking for an exceptional individual who can lead our Fire & Rescue Service Chichester, West Sussex
Recuriter: West Sussex County Council

School Crossing Patrol

Brent Council
£21,591 - £22,377 p.a. inc. pro rata.
Looking for someone that is friendly, has great communication skills and enjoys working with children. Wembley, London (Greater)
Recuriter: Brent Council

Engineer (Highway Design)

Darlington Borough Council
£31,371 - £33,799
Looking to employ an experienced person within the Highway Design team to meet the challenge of enabling development... Darlington, Durham
Recuriter: Darlington Borough Council

Project Manager – Major Maintenance and Infrastructure Projects 

Liverpool City Council
£42,683 - £47,491 
The successful candidate will ensure that effective procurement and delivery of highways maintenance and improvement. Liverpool, Merseyside
Recuriter: Liverpool City Council

Green Space Development Manager

Camden London Borough Council
£45,504 - £52,786
The successful candidate will join a dynamic, multi-disciplinary team and contribute to our commitment to deliver for... Camden, London (Greater)
Recuriter: Camden London Borough Council

Green Space Project Officer

Camden London Borough Council
£40,829 - £47,360
The successful candidate will join a dynamic, multi-disciplinary team and contribute to our commitment to deliver for the people of Camden, London (Greater)
Recuriter: Camden London Borough Council

Senior Principal Planning Officer - Fixed Term

Royal Borough of Greenwich
£39.774 - £42.684
Looking for key members of the team that will be instrumental in transforming the Borough and opportunities available for residents.  Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Career Grade Planner

Royal Borough of Greenwich
£27228 - £36711
In this role you will deal primarily with small-scale planning applications covering a wide range of planning issues. Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Career Grade Planning Officer

Royal Borough of Greenwich
£27.228 - £36.711
We offer a great opportunity to develop your career with a positive approach to development and a desire to put... Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Director of Place and Communities

Ashfield District Council
£79,070
As the Director for Place and Communities you will provide strategic and operational leadership across a range of key services including Waste... Nottinghamshire
Recuriter: Ashfield District Council

Highways Operative - 3 Jobs

Kirklees Metropolitan Council
£18,426 - £21,166 (plus 20% enhancement if working in the night team)
You will be responsible for providing effective maintenance and development of the Kirklees road network carrying out a range of highway works. Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Rights of Way Officer

Cambridgeshire County Council
£26,470 - £28,221
The purpose of the role is to implement and advise on the maintenance, protection, improvement and promotion of access... Cambridgeshire
Recuriter: Cambridgeshire County Council

Road Safety and Sustainable Transport Assistant

Telford & Wrekin Council
£11.41 - £12.35 per hour
Are you passionate about Road Safety, and want to help educate road users and develop their skills? Wrekin, Telford
Recuriter: Telford & Wrekin Council

Engineer

Cambridgeshire County Council
£32,825 - £35,401
As an Engineer, you will be required to lead the delivery of a wide range of highway improvements and maintenance projects to... Cambridgeshire
Recuriter: Cambridgeshire County Council

Head of Highways Infrastructure

Leeds City Council
£72,397 - £79,637
Seeking an exceptional candidate for the position of Head of Highways Infrastructure to lead on the authority’s duty to... Leeds, West Yorkshire
Recuriter: Leeds City Council