Lessons From Crossrail

The official statistics for Crossrail are certainly impressive:

  • a total ‘funding envelope’ of £14.8 billion;
  • 100km route from Maidenhead and Heathrow to Shenfield and Abbey Wood (via Paddington, Tottenham Court Road, Liverpool Street and Canary Wharf);
  • Europe’s largest construction project;
  • 35 million working hours already completed  by summer 2013; and
  • 200 million passengers per annum expected on opening in 2018.

Funding

The funding framework was put in place in October 2007. Following the Comprehensive Spending Review in October 2010, a funding envelope was agreed to deliver the Crossrail scheme. The key elements of the funding package were as follows:

  • The Mayor of London (through TfL and the GLA) to contribute £7.1bn. This includes a direct contribution from TfL of £1.9bn and contributions raised through the Crossrail Business Rate Supplement (BRS), Section 106 and the Community Infrastructure Levy (CIL).
  • Crossrail farepayers will contribute towards the debt raised during construction by TfL.
  • Government will contribute through a DfT grant of £4.7 billion during construction.
  • London businesses will contribute £4.1bn through a variety of mechanisms, including the BRS.

Network Rail will undertake works (worth up to £2.3bn) to the existing national rail network raised through projected operating surpluses from the use of Crossrail services.

There were also to be considerable additional financial contributions from some key beneficiaries of Crossrail:

  • construction is part funded by the City of London Corporation, which has agreed to make a direct contribution of £200m and in addition will seek contributions from businesses of £150m, and has guaranteed £50m of these contributions.
  • BAA has agreed to a £230 million funding package.
  • Canary Wharf Group has agreed to contribute £150m towards the costs of the new Canary Wharf Crossrail station at Canary Wharf.  Canary Wharf Group is also designing and building the new station.
  • Berkeley Homes has agreed to construct a station box for a station at Woolwich.

The £14.8 billion funding envelope for the project is a fully inclusive cost, allowing for both contingency and expected inflation.

MC900056535 EngineersLabour Shortages

On Monday 29 July 2013 The Independent ran an article by Mark Leftly entitled “Mega-projects Crossrail and HS2 facing cost hike on skills gap”. The article reported that recruitment consultants were warning that during, peak periods of construction, Crossrail and the proposed High Speed Two (HS2) mega-projects could be “thousands” of engineers short. Keith Lewis, managing director at Matchtech, told The Independent that with so many projects going on over the next 10-15 years, HS2 and Crossrail would be “hundreds or thousands rather than dozens” down on the engineers it needs. This is likely to increase labour costs.  Lewis was quoted as saying

“There’s not enough work done on making engineering a career of choice. There is a difference between perception and reality – people still see engineering as being an oily rag and blue overcoat.”

The Independent also notes that the image has also put off women from entering an industry that suffers from a desperate gender imbalance. Only one-in-10 engineers are women. It has been estimated that the UK will need to train nearly 100,000 new engineers and scientists over the next three years simply to replace those who will have retired. The picture is further complicated because engineering skills are now readily transferred between sectors and countries. British engineers can switch from the UK rail sector to the automotive sector or work on a well-paid overseas project such as the Dubai Metro.

Project Phasing

Crossrail2  (formerly known as the Chelsea-Hackney Line) could start construction in 2019. This assumes that Crossrail1 would be completed in 2018, as programmed. It is intended that HS2 will proceed with construction in 2017.  It is conceivable that major expansion of airport capacity could be happening at the same time in South East England. This would seem to create the perfect conditions for cost escalation on these major transport projects.

Once again, this illustrates the importance of medium and long-term planning for transport. The unintended consequences of political indecision can be extremely costly for us all.

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About djtplan

Independent Transport Planner
This entry was posted in Consultancy Business, Transport Economics, Transport Planning, Uncategorized, World Cities. Bookmark the permalink.

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