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Getting the funding moving

Crossrail - Merchant banker Adrian Montague is set to be a key player in getting London's Crossrail project off the ground.

Transport secretary Alistair Darling last week gave London's £10bn Crossrail project a shot in the arm by giving merchant banker Adrian Montague a key role in its development.

Darling last week named Montague as independent chairman of Cross London Rail Links (CLRL), the public sector company set up to promote Crossrail.

As chairman, Montague will have a vital casting vote on the board, which is split equally between Department for Transport appointees and representatives of London mayor Ken Livingstone's Transport for London (TfL) department.

It is no surprise that Montague is a Crossrail fan. He strongly believes London needs the project which will connect its eastern and western suburbs, easing congestion on the existing Underground network.

'I do not see how London can survive without an investment in Crossrail, ' he told a conference of bankers in Madrid last month.

And he is someone well used to sorting out difficult projects and resolving difficult financial issues.

He left merchant banking in 1997 to join the newly elected Labour government's Private Finance Initiative taskforce. While there he was instrumental in the rescue of the Channel Tunnel Rail Link (CTRL), whose operator London & Continental reached the brink of financial collapse in 1998.

Montague helped deputy prime minister John Prescott to devise a new private finance package underpinned by government guarantees - a first for a PFI project and, perhaps, a sign of things to come for Crossrail.

He has also been closely involved with the rescue of Network Rail, where he has just stepped down as deputy chairman.

He took up the post in December 2001 as the new track operator emerged from the ashes of Railtrack.

At the same time he is chairman of troubled power producer British Energy, which is in the middle of its own complex financial restructuring operation.

Over the next five months Montague's job will be to drive through drafting of the enabling bill which will allow Crossrail to be built.

His tenure runs until 31 March, by which time the bill is expected to have been put before parliament.

Sorting out the basis of a funding package for Crossrail will be among Montague's priorities.

He believes it is vital that some sort of agreement on the balance of public and private finance for the scheme is established before the bill is debated by MPs.

Montague believes Crossrail will need government guarantees to underpin its private finance element to keep the cost of borrowing down, just like the rescued CTRL did.

He says that the government would be unable to walk away from the project if the private builder/operator was to run into financial problems. As a result, it would be better for the public sector to have a close financial involvement from the outset.

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