Contingency fund must cover rail shortfall

Crossrail workers inspecting the first completed section of tunnelCrossrail workers inspecting the first completed section of tunnel
Crossrail workers inspecting the first completed section of tunnel
Taxpayers will have to cover a £160m shortfall in private-sector funding for London’s Crossrail project after the Department for Transport (DfT) failed to secure the expected contribution from Heathrow Airport, the spending watchdog has claimed.

A report from the National Audit Office (NAO) said the DfT has set aside a large enough contingency fund to cover the missing cash, and found that taxpayers’ interests had been “well protected” on a project which is “on course to achieve value for money” and to be fully open by its 2019 delivery date.

Plans for the £14.8bn line initially hoped for £230m from Heathrow, to reflect the benefit the airport is likely to gain from the new link to central London, Berkshire and Essex.

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However, the Civil Aviation Authority (CAA), calculated that with the airport already running at or near capacity, Crossrail would produce no net benefit in terms of additional passengers.

After the CAA set aside a provisional pot of £100m, the DfT lowered its proposal to £137m, but this month the regulator decided that Heathrow’s contribution will be just £70m.

The shortfall means that the DfT’s direct contribution to the project will rise from a projected £4.8bn to almost £5bn, but this remains inside the £5.2bn set aside in case it failed to secure sufficient funding from private sources, said the NAO. Despite noting that “the Department has not secured all the private sector contributions for which it had hoped”, the NAO said: “Taxpayers’ interest in the Crossrail programme has so far been well protected.... If progress in providing the new rail service for London and the South East can be maintained and risks managed, then the programme is on course to achieve value for money.”

House of Commons Public Accounts Committee chair Margaret Hodge said: “The Crossrail project has been well managed and controlled to date. It is on track to deliver on time and within budget, and they deserve praise for their success so far.

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The Department must now continue with the good work it has been doing with Transport for London and Crossrail Ltd to ensure that they deliver the expected benefits of this vital project.

“In particular, they must get on with awarding the contract for the trains that will run on the line to avoid any delay in services starting.”

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