The cost of the Crossrail delay is likely to be between £1.6bn and £2bn according to the emerging findings of an independent review by accountancy firm KPMG.
The figures were reported as part of an announcement made by the mayor of London that the Greater London Authority (GLA) and Transport for London (TfL) had confirmed a financing package with the government for the final stages of the Crossrail project.
It was also confirmed that the Autumn 2019 deadline for opening could now “no longer be committed to at this stage”, with a team from Crossrail working to produce a “robust and deliverable schedule”.
In August this year Crossrail Ltd announced that it expected Crossrail, to be known as the Elizabeth line, will open through central London in autumn 2019, rather than December 2018. In October New Civil Engineer revealed a revised timeline for works and testing working towards a 2019 finish date.
However, it has now said that it had become clear that more work was required “than had been envisaged to complete the infrastructure and then commence the extensive testing necessary to ensure the railway opens safely and reliably”.
TfL said core elements of the infrastructure being delivered by Crossrail Ltd, including the stations and the fit out of the tunnels, were at varying stages of completion and more funding was therefore required to complete it, as well as the extensive safety and reliability testing needed for the new railway systems.
The trains procured by TfL are already in operation between Liverpool Street and Shenfield, and Paddington and Hayes & Harlington.
KPMG was commissioned to carry out the independent review, which is nearing completion, into Crossrail Ltd’s financing and governance arrangements.
TfL said that the new figure of up to £2bn included £300M of funding which had already been contributed by the Department for Transport (DfT) and TfL in July 2018, but this still left an estimated £1.3bn to £1.7bn to complete the project.
Under the new estimate, the mayor of London and the government said it had agreed a financial package to cover the increased budget with the Greater London Authority (GLA) allowed to borrow up to £1.3bn from the DfT.
TfL said the GLA would then repay this loan from the existing Business Rate Supplement (BRS) and Mayoral Community Infrastructure Levy (MCIL). The GLA will also provide a £100M cash contribution, taking its total contribution to £1.4bn which it will provide as a grant to TfL for the Crossrail project.
Because the final costs of the Crossrail project are yet to be confirmed, TfL said a contingency arrangement had also been agreed between TfL and the Government. This, it said will be in the form of a loan facility from the DfT of up to £750M, should the higher end of the estimate be realised.
The combined financing deal will replace the £350M interim financing package offered by the government in October.
Last week Crossrail chairman Sir Terry Morgan resigned over the delay. He had held the post since 2009.
Mayor of London Sadiq Khan said: “When Crossrail is complete it will truly transform travel across the capital, with new state-of-the-art trains adding 10% to central London’s rail capacity and boosting the economy by billions of pounds.
“I haven’t hidden my anger and frustration about the Crossrail project being delayed. This has a knock-on consequence of significant additional cost to the project. It has been increasingly clear that the previous Crossrail Ltd leadership painted a far too optimistic picture of the project’s status.”
It also emerged this week that Transport for London (TfL) will have to pay an annual charge of £15M to the Canary Wharf Group if the district’s Crossrail station is not complete by 2021.