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TfL 'working on' financing package for Crossrail

3133711 crossrail

Transport for London (TfL) has said it is working with mayor Sadiq Khan and the government on a financing package to ensure Crossrail is completed.

The Financial Times has reported that the project could need “additional funding” worth hundreds of millions of pounds and this could be announced within a matter of weeks, although TfL gave no information about what the package could involve.  

A spokesperson for TfL said: “Everyone involved in this project is fully focused on bringing the Elizabeth Line into service for passengers as soon as possible. Work is continuing between the government, Mayor and Transport for London on finalising a financing package to deliver this.”

It follows Crossrail chairman Sir Terry Morgan saying he expects that another package of funding will be announced for Crossrail, following significant delays and two previous bailouts.  

“I think Crossrail does [need more money] because testing of the systems integration is still on-going,” Morgan said, speaking on BBC Radio 4’s Today Programme on Monday. 

“There isn’t a train yet running as it should in the critical sections in the tunnels and I am expecting there to be another announcement of additional funding – I don’t know how much.”  

The Crossrail project, to be known as the Elizabeth Line, came under fire in August this year when it announced that the opening of the central section would be delayed from December 2018 to Autumn 2019.

As a precursor to this, in July, the government announced that the overall funding for the project had increased by £600M to £15.4bn. It then later agreed to make £350M of short term finance available to Crossrail Ltd.

As well as spiralling costs, the delays are costing Transport for London (TfL) hundreds of millions in lost revenue.  

Vice president at the credit rating agency Moody’s Zoe Jankel said: “Crossrail’s delayed opening is one of a number of budgetary challenges that TfL is facing. 

“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.” 

Speaking at the Civil Engineering Contractors Association (CECA) conference TfL managing director customers, communications and technology Vernon Everitt said the organisation agreed saying the lost revenue from Crossrail had “compounded” the issue of falling revenue from a subdued economic climate. 

”We’re going to need to publish a business plan over the next couple of weeks that sets out the consequences for us from a capital point of view and from the revenue foregone,” said Everitt. ”Crossrail will be sensational when open, although the delay is disappointing.”

London Mayor Sadiq Khan also wrote to the National Audit Office (NAO) in November, warning that further funds will be required despite the previous payment and loan.  

However, as the rumours of further funding gain traction, a rift is opening between Morgan and Khan, with Morgan insisting he made Khan aware of the delay to the project in July, and the mayor claiming he was only made completely aware of the delay in August.  

 

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