Supply chain price hikes have added an extra £50M to the cost of the Metropolitan Line extension scheme, according to Transport for London (TfL).
TfL took on the project, formerly known as the Croxley Rail Link, from Hertfordshire County Council in November 2015. Then a funding package of £284M was in place, to which TfL had committed £49M. The scheme will connect the Metropolitan Line to stations in Watford.
Now a review of the project has found that an additional £50M will be needed to finish it. TfL said this reflected information it had received from the supply chain. Last June New Civil Engineer reported that an alternative procurement route was being considered to cut costs on the £284M project. This included cutting down the role of main contractors because they came with “big overheads and costs”.
TfL said its project delivery team should continue to deliver the stage one design work, which is expected to be completed by late July. It says stage two works should only start when a revised funding package or delivery strategy is in place.
London mayor Sadiq Khan has written to the Department for Transport (DfT) to ask for more funding.
“This project is outside London and therefore responsibility for delivering it ultimately lies with the government. The previous mayor committed £49M of London taxpayers’ money to delivering it without properly working out how much it would cost. Since then, estimated costs have spiralled by an additional £50M,” said a spokesperson for Khan.
“TfL are happy to discuss with the government how this funding gap can be filled, but as this scheme is outside London it is not right that London taxpayers should have to pay even more towards it.”
TfL denied the project had been cancelled.
“After taking on the Metropolitan Line extension from Hertfordshire County Council we have undertaken a detailed review to establish the true cost of the project. Following this extensive work we estimate that to complete the extension, which is located outside of London, we would need to double the funding commitment we have already made, requiring more than an additional £50M that we are unable to provide,” said London Underground director of strategy and service development David Hughes.
“This does not mean the project has been cancelled and we remain open to helping assist the Department for Transport in finding an alternative funding package for the project, or alternative schemes that may be more affordable.”
The DfT suggested the agreement made in 2015 still stands.
“Croxley Rail Link will deliver significant transport benefits and significantly boost economic growth in Watford and the wider north-west London area. We wrote to the mayor in January saying that we expect TfL to take forward the scheme in line with the agreements put in place in 2015. This remains our position,” said a DfT spokesperson.
The shortfall was revealed in a letter from TfL head of rail investment Robert Niven to London Assembly member Gareth Bacon .
“It is important to note there has been no change to the scope of the project; this increase in costs is a reflection of what the market is telling us. We have also done detailed work to look at whether costs can be brought down but unfortunately they cannot be reduced. We simply do not have the funding to be able to absorb these additional costs,” states the letter.
Bacon, a Conservative, blamed the budget shortfall on Khan’s fare freeze.
“The Metropolitan Line extension’s future has been put in jeopardy due to the Mayor’s poor decision-making. His partial fares freeze has put TfL’s budget in total turmoil, and left him with no room to move if new expenses crop up,” he said.
“The Mayor will not be able to find this funding and instead wants the government to accept the burden of saving this project.”