Newspaper article The Evening Standard (London, England)

Crossrail Backers Raise Doubts over Financing

Newspaper article The Evening Standard (London, England)

Crossrail Backers Raise Doubts over Financing

Article excerpt


SERIOUS doubts were raised today over funding for Crossrail with warnings that the landmark project could be hit by delays.

The Standard can reveal that vital finance for the rail scheme has not been agreed nearly a year after the Government claimed a ?16 billion deal had been struck.

Airports operator BAA is refusing to publicly commit a specific sum to the cross-London rail link despite being expected to put in around ?250 million.

Concerns are also growing that City chiefs will struggle to raise a further ?150million for the project from London businesses in the economic downturn.

Experts are warning that the funding agreement could unravel, delaying the long-awaited scheme for up to five years.

Failure to raise funds from the private sector could lead to the Treasury dragging its feet over releasing billions for the project, particularly in an economic slowdown, one former minister said.

But the Department for Transport denied that the funding package would be revised and said business had to make a "fair contribution".

Questions also remain over the three main funding pillars ?3.5 billion from a special levy on London businesses, ?2.7 billion to be borrowed on the back of future rail fares and ?5.1 billion from the Government.

The Mayor's office stopped short of giving a cast-iron reassurance that the billions expected from the supplementary business rate would be raised.

The financial worries emerged weeks after the Crossrail Bill received Royal Assent, effectively giving the project outline planning permission. Former Tory transport minister Steve Norris said: "Don't let anybody believe that there are not some serious question marks over the project. It could slip." Mr Norris believes the Government will only release the billions needed once a deal is finalised and that this needs to be done swiftly so contracts can be signed and work progressed.

Sir Peter Hall, professor of planning at University College London, said he was stunned to learn that BAA had not yet agreed how much it was putting in.

Speaking from China, he told the Standard: "These deals have a habit of unravelling. That's why it is astonishing that the details are so vague. There are serious concerns over whether the package is really there." He also warned of the risk of construction delays.

BAA said it would pay towards Crossrail and that it was "working with" the Department for Transport and Crossrail on a final amount.

The flow of cash for Crossrail is due to hit more than ?1billion by 2010 and ?2 billion-a-year by 2012 before slowing ahead of its planned opening in 2017.

The line will run from Maidenhead and Heathrow under central London to Shenfield and Abbey Wood in the east. …

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