Posted 23rd November 2020 | 6 Comments

Crossrail could be mothballed as TfL financial crisis continues

THE delayed project to build Crossrail under central London, connecting it to existing railways on either side, may be held up once again – this time by the Covid pandemic and its effect on Transport for London revenues.

The central section should have opened in 2018, but progress has been delayed by various problems including train software and the fitting-out of stations.

It has been reported that the new transport commissioner Andy Byford has written to the Department for Transport’s permanent secretary Bernadette Kelly, warning her that the continuing financial straitjacket at Transport for London means that Crossrail is now in need of £80 million from the government if work on the project is to continue without interruption. Mr Byford has also warned that without this funding, he could ‘relinquish responsibility’ for Crossrail, which is now expected to cost £18.7 billion after a further reappraisal in August this year.

According to a Whitehall source quoted by Sky News, his letter including the phrases: ‘If agreement is not reached this week, we will have no option but to mothball the project and to seek alternative governance for its eventual completion,’ and that Crossrail was ‘no longer able to make any further financial commitments’.

Mr Byford is said to have continued: ‘I sincerely hope that we can avoid such a Doomsday scenario.’

Transport for London received a second tranche of financial support from the government at the start of this month. The additional funding, worth some £1.8 billion in a combination of direct grants and new borrowing, is intended to keep TfL’s normal services going until March, but did not apparently allow for any Crossrail costs.

Mr Byford has reportedly explained to Ms Kelly: ‘We therefore do not have the financial headroom to provide additional funding unless the government provides funding certainty now by agreeing to the heads of terms we have submitted to you … These heads of terms include the majority of Crossrail's funding deficit being covered by borrowing from the GLA [Greater London Authority], which is, in our view, an extremely good deal for the government given the wider financial impacts of current circumstances and ensures that London continues to pay for the majority of the additional funding required.’

After the news of the new funding broke at the start of this month, TfL had said: ‘Discussions on funding the additional costs to complete the Crossrail project are not included as part of this funding package but are being progressed in parallel, remain constructive and are expected to conclude soon.’ It has now added: ‘TfL, the GLA and government all continue to have discussions around the additional funding needed to complete the Crossrail project.’

The DfT said: ‘The government remains committed to the efficient completion of the project, in a way that is fair to UK taxpayers, and that ensures London – as the primary beneficiary of Crossrail – bears the additional costs. We are working with the Greater London Authority and Transport for London to develop a funding solution to see Crossrail's completion. It is unfortunate, in contrast to other construction projects, the Mayor chose to unnecessarily halt work on Crossrail during the pandemic.’

Sky has also quoted a ‘mayoral source’ as saying: ‘TfL has stepped forward and taken on full responsibility for delivery of the Crossrail project and, at the government's insistence that “London pays”, the current funding proposal will see the vast majority of these costs covered by Greater London Authority borrowing.

‘This offer was made to ministers months ago and would mean London would cover more than its fair share of a project whose financial benefits will overwhelmingly go to the Treasury. It is inconceivable that a deal cannot be done on terms so generous for the government.‘

The RMT union, meanwhile, is concerned about the implications for jobs.

RMT general secretary Mick Cash said: ‘What's happening between the Government and TfL is nothing short of a disgrace. As we approach next year's London Mayoral Election it's clear the Government are using TfL and our members as a political football and rather than stick to their pledge of “Building Back Better” they're starving TfL of vital funds and playing games with workers’ livelihoods.

‘London transport and its workforce are vital to the economic recovery from Covid-19 and RMT will not be afraid to do whatever is necessary to protect jobs and livelihoods.’

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Michael Turberville, Reading, UK

    Mothball... LOL
    Typical English mentality to everything.... take decades to do any infrastructure, starve it of funding, then decide to scrap / mothball after having already spent £20+ Billion. haha
    The cost is what it cost. If you want it done, do it and stop whinging about something that is less than 0.5% of the overall project cost.
    IF this had been built back in the 1950s, 60s, 70s, etc... as it should have been we would now be having this very Typical English rhetoric about xR12 or xR22. All of which are Long over-due.
    With Proper funding and the motivation and will in government, we could already have a transport system - the Chinese would envy.
    Every city the size of Reading and larger - China built several metro lines with more under construction.
    We should have a HSR network with No two point anywhere in UK/Eire that are more than two hours apart by HSR.
    Rail is Never going to be fiscally self sufficient. Rail is entirely about the revenue it generates by the places connected.
    Land's end to John O'Groats and Channel Tunnel portal to Galway/Sligo in under Two Hours will have far more passengers travelling because it makes anywhere, everywhere within 800 to 1000km of London - a Day Trip.

  • Andrew Gwilt, Benfleet Essex

    No why I said December 2918. It should say December 2018. Silly me.

  • Melvyn Windebank, Canvey Island, Essex

    Crossrail seems to have entered a Dr Who style of parallel universes where in one universe testing is continuing with successful running of several trains in central section according to update issued yesterday.

    While we hear that TFL have demanded extra funding else Crossrail will be mothballed all for the paltry sum of £80 million!

    It seems to have become a political football and if it were mothballed how much and how long would it take to get back to where we are today ?

  • Andrew Gwilt, Benfleet Essex

    Mothballing Crossrail (Elizabeth Line) is probably a stupid idea. And I think Crossrail 2 will not happen for at least 5 years if Crossrail is to be completed before 2025. That is was suppose to of opened in December 2918 but it was pushed back causing more delays and more money being spent on London’s newest railway link. If only it would of happened back in the 1990s and completed by 2000. Or construction could of started in 1997/98 and completed in 2008/09 before the London 2012 Olympics and Paralympics.

  • Robert Goundry, LEAMINGTON SPA

    Crossrail will pale into insignificance beside HS2. Now there's a candidate for mothballin before building.

  • John B, London

    Just how badly this project has been managed is beyond belief. More than 11 years after construction started and despite spending more than £19bn, it still isn't ready.

    There needs to be a public inquiry into what has happened and the appropriate lessons drawn for HS2 if that is to be allowed to continue.