Critical transport schemes in London including Crossrail and the Tube upgrade are to survive government spending cuts, NCE has learnt.
Funds “set aside”
NCE understands that the Treasury has set aside funds for Crossrail and vital Tube upgrade projects including the reconstruction of Bond Street and Victoria underground stations.
Details of public spending cuts will be announced in the government’s Comprehensive Spending Review on 20 October.
But funding for Crossrail and Tube projects will only be retained if London mayor Boris Johnson abandons plans to scrap the Western extension of the congestion charging zone or axes concessionary bus and tram fares for 16-17 year olds.
“Boris has to give up one of his sacred cows to show the rest of the country that he is making cuts,” a senior Transport for London (TfL) source told NCE.
It is understood that Johnson is reluctant to do either and talks with TfL were understood to be ongoing as NCE went to press.
Scrapping the Western extension to the capital’s congestion charging zone was one of Johnson’s election pledges, and he had planned to axe it by December.
Scrapping concessionary fares is equally unpalatable for the mayor, who will have to seek re-election against Labour candidate Ken Livingstone – a staunch supporter of lower fares.
TfL is desperate for Johnson to clear the way for its major projects after acting on Treasury demands to drive out costs.
Earlier this year it forced the end of the Tube PPP and has already announced plans to cut 250 jobs on lines maintained by Tube Lines to cut costs (News last week).
Crossrail has spent most of 2010 carrying out a value engineering exercise.
It confirmed this week that sufficient cost savings had been found to deliver the scheme in full. A new construction delivery cost for the Crossrail scheme, currently set at £15.9bn, will be formally presented to the Department for Transport (DfT) later this year.
Speculation had been rife that the Abbey Wood branch would be axed and that the station at Bond Street would be scrapped.
“Boris has to give up one of his sacred cows to show he is making cuts”
Crossrail said this week no stations would need to be cut. Construction of Woolwich station, however, remains dependent on developer funding being agreed.
Crossrail instead said savings would come from designing out unnecessary items. Plans to design and build new trains for the scheme have been ditched andWhitechapel station has been completely redesigned to save £30M. Canary Wharf station has also been redesigned.
Crossrail chairman Terry Morgan said it was critical that every pound invested in the scheme achieves maximum value for money.
“Crossrail is bearing down on its whole cost base, while ensuring delivery of a new railway that is fit for purpose and delivers the capacity improvements required,” he said.
Crossrail “more imprtant than before”
The latest Crossrail business case shows that the project is now more important to the UK economy than ever before as it is expected to deliver a boost of up to £42bn.
The London Assembly’s transport and economic development committees this week argued in a letter to chancellor George Osborne that investment in Crossrail and the £30bn Tube upgrade together are worth £78bn to the national economy.
TfL commissioner Peter Hendy is understood to have fought hard to avoid cuts to his capital budget. In June, he told NCE’s London Rail conference that London projects like Crossrail and the Tube had a higher value attached to them than projects in the rest of the UK.
“I don’t think there’s much left in our programme that’s optional,” he said. “It’s not as if there is £500M of discretionary spend in there. Boris [Johnson] has already thrown them off the ship. What’s left is what the city needs. London is the engine of the UK economy. The government needs to make sure infrastructure development continues.”
This week, Johnson’s transport adviser Kulveer Ranger reiterated Hendy’s view at the Labour party conference. “Crossrail is needed now, but it must be delivered efficiently,” he said.