The charity behind the proposed Thames Garden Bridge must repay £10M of Transport for London (TfL)’s contribution to the project, it has emerged.
TfL, which is chaired by London Mayor Boris Johnson, had pledged £30M to the project but last week slashed this to £10M.
In the meantime the charity has already spent £20M of the sum on preconstruction work.
It is understood that a deal is being finalised to give the trust 50 years from the point the bridge opens to repay the £10M. The deal is thought to be a compromise which will end a stand off between TfL and Lambeth Council over the granting of a lease for land at the bridge’s southern landfall.
Lambeth Council leader Lib Peck had suspended lease negotiations because of concerns about the level of taxpayer funding for the project.
A Garden Bridge Trust spokesperson said: “TfL, as a funder and facilitator of major transport infrastructure projects, originally contributed £30M to the project. The total TfL contribution has now been limited to £10M.
“About two thirds of [the original contribution], circa £20M, has been spent on detailed preconstruction work. The new agreement is that TfL’s contribution will be capped at £10M and any funds spent over that amount will be treated as a loan and reimbursed over a period of years once the bridge is built.”
Johnson’s U-turn leaves the charity with £50M of the estimated £175M cost of the crossing to find. Construction is due to start within the next few weeks.
The trust spokesman said: “The trust has already raised approximately £85M of private funding in 18 months and we will continue to fundraise throughout construction. The success of our fundraising to date means we are confident we can raise any additional funds within the agreed timeframe.”
He also insisted that the widening funding gap had not altered the design or construction timetable for the scheme.
Garden Bridge Trust chairman Lord Mervyn Davies said: “We are delighted to move forward with the project. We are delighted the Garden Bridge can now progress and are grateful for all the support we’ve had.”
A spokesperson for Johnson said: “The mayor is pleased that Lambeth Council is ready to proceed and help the Garden Bridge Trust to deliver this landmark project. The mayor believes the bridge will be a fantastic addition to London’s skyline and a driver of jobs and growth for the capital.”
Peck said: “I’m pleased that Londoners are getting a better financial deal, particularly at a time of austerity when all public sector organisations are being forced to make deep cuts to services.
“We’ve been in tough negotiations with the Garden Bridge Trust and TfL and I’m pleased we’ve successfully agreed a deal that will cut London taxpayers’ contribution towards the Garden Bridge by two-thirds.”
A joint venture of French firm Bouygues and Italian contractor Cimolai was selected in April as preferred bidder for the crossing between Blackfriars and Waterloo Bridges in central London.
The Thames Garden Bridge was masterminded by London 2012 opening ceremony cauldron designer Thomas Heatherwick with support from engineering firm Arup. Actress and campaigner Joanna Lumley has given it celebrity endorsement.
But engineers have failed to be convinced. Independent consultant Simon Bourne last year insisted a bridge with the same look, feel and functionality could be created for less than a third of the cost.
The trust said this summer that pre-construction work carried out by the joint venture had led to a revised programme that would cause less disruption to local people.
The project is due to start on site in January 2016, and be open to the public by mid 2018.