Crossrail faces £150m funding shortfall amid pandemic uncertainty
Image credit: Crossrail
Crossrail is facing a funding shortfall of £150m and it is still unclear about when key services and stations will open, MPs on the Public Accounts Committee (PAC) have said.
By the time passengers can finally travel the full length of the Elizabeth Line, Crossrail is expected to have cost a total of around £19bn, including nearly £2.9bn in loans from the taxpayer to TfL and the Greater London Authority.
Originally projected to cost £14.8bn and open in 2018, Crossrail’s budget has spiralled upwards. In May 2019, the National Audit Office estimated that the funding package for Crossrail stood at £17.6bn and it wouldn’t open by March 2021.
Since that estimate, milestones were missed in 2019 and into 2020 due to Crossrail continually uncovering problems or identifying requirements for new work alongside the Covid-19 pandemic, which added further cost and delay to the programme.
In a report, the PAC found that Crossrail Ltd is still unable to give passengers or businesses a clear timetable for the opening of the Elizabeth Line or even what services will run on the line when it does open. Critical works still need to be completed before the company can provide any certainty on when all remaining works, including many stations, will be completed.
Even with the Government bailout, the pandemic-induced collapse in passenger numbers to levels not seen since the Victorian era leaves a potential £150m funding shortfall for the Crossrail project. The Department for Transport also expects £750m of loans to Crossrail - separate from over £4bn of loans from government to support TfL during Covid - to be financed and repaid from TfL’s own revenues, the PAC added.
Fare revenue is critical to TfL’s finances, with 72 per cent of its income coming from fares before the pandemic, which have since collapsed, and TfL estimating an ongoing 18 per cent drop in demand for rail by 2031 compared to pre-pandemic forecasts.
The Committee says it therefore remains very uncertain where the shortfall in funding for Crossrail or the loan repayments will come from and TfL must identify new revenue streams.
The report also suggested that passenger demand for the Elizabeth Line itself will be difficult to predict, given the uncertainty surrounding Covid-19 and the possible future changes in people’s working patterns.
Dame Meg Hillier MP, PAC chair, said: “We are finally, thankfully, seeing a clearer sense of ownership, responsibility and determination to complete the Crossrail programme from those in charge, but there remains a serious £150m funding gap to finish the programme. There must be a focus now on finding real solutions to this.
“With fares down because of the ongoing impact of Covid, we also need more clarity on the plans and timescale for repaying the significant government loans.”
Andy Byford, TfL commissioner, said: “While I understand that everyone wants to know the specific opening date for the Elizabeth Line, this will not be confirmed until we are completely satisfied that we are ready to go.
“The project has my full, personal attention, the opening window continues to be what I have always said - namely the first half of 2022 - and the final cost will not exceed a penny more than the budget which TfL inherited when it assumed full control of the project under my direction.”
Mark Wild, chief executive, Crossrail, said: “The forecast cost of completing the project remains unchanged at £18.9bn. Now, more than ever, Londoners are relying on the capacity and connectivity that the Elizabeth Line will bring.
“Significant progress has been made across the project, with delivery of the Elizabeth Line now in its final complex stages.”
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