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Last Updated: Wednesday, 1 August 2007, 23:14 GMT 00:14 UK
Mind the Crossrail funding gap
By Bill Wilson
Business reporter, BBC News

Crossrail geologists carry out tests in London
Tests have already been carried out on sections of the Crossrail route

When Crossrail was first envisaged, Margaret Thatcher was prime minister, Liverpool were on the way to the football league championship and Jive Bunny was top of the pop charts.

Since then, the planned rail link - designed to run through London on an east-west axis - has been repeatedly delayed or shelved, only to be dusted down and put back in motion.

Now, 18 years on, the 15bn scheme has once again made it off the drawing board and has been debated in a House of Commons committee, in the shape of the Crossrail Bill.

Yet despite this head of steam, the project for a proposed high-speed rail link from Berkshire to Essex via central London could well hit the buffers again, unless funding is forthcoming.

There has been renewed concern after the government's railways White Paper failed to mention how it will fund Crossrail.

'Very expensive'

Ministers and the Treasury have yet to indicate any firm cash commitment to the project, while it is also unlikely that London Mayor Ken Livingstone or Transport for London will be asked to pick up the bill.

"One of the biggest challenges for transport is Crossrail," Chancellor of the Exchequer Alistair Darling told business leaders last week.

A link between Heathrow and the City of London is desperately needed, both for business and the public
London Travel Watch

The government was "committed" to the scheme, the ex-transport minister declared.

But he pointed out that the scheme was "very expensive and before we can make a decision, we need to make sure it's affordable".

"And that will mean substantial contributions from outside government as well as government itself," he added.

However, at present, all the Treasury will reveal is that it is trying to find a "funding formula".

Crossrail - artist's impression
The route would link firms in the City of London to Heathrow

As Mike Crowhurst of pressure group Rail Future, which campaigns for better rail services, says: "We don't know where the funding will come from. One gets the impression the government is anxious to avoid putting in any money.

"It has been suggested that one form of funding may be in the form of a development land tax. But there is a great deal of confusion that needs to be cleared up."

He adds: "Another concern is that this proposal of a west-east connection through London has been about in various forms for more than 50 years, without ever getting built."

'Future problems'

The high-speed rail link from Berkshire to Essex is vital to keep London ahead of rival cities, business says.

The high-speed line, which would link Heathrow with the City and Canary Wharf, is seen by Mr Livingstone and business leaders as essential to keeping the capital moving.

Recently, Mervyn Davies, chair of international bank Standard Chartered, said that if London wanted to continue its recent success and compete with other cities as an international finance centre, then it needed "good communication links".

"There is no doubt that if we do not have it [Crossrail], we will have future problems," he said.

And Jo deBank at watchdog London Travel Watch agrees.

"It definitely needs to be built, as a link between Heathrow and the City of London is desperately needed, both for business and the public.

"However, at the moment, it is very confusing. The government says it is supporting it, but the funding is not there at the moment."

Crossrail platform sign
Seven new stations in central London would be built

Industry insiders say the final funding may be a hybrid arrangement of perhaps one-third government funding and one-third business funding, with the final third raised through some sort of borrowing against future ticket revenues.

"Business in principle is agreed to the fact it will have to help towards the issue of coming up with funds," says Lauren Preteceille of London First, which represents 300 larger employers in the capital.

"We are very in favour of Crossrail, it is vital to London's continuing competitiveness.

"But we want to know what the final figure is before we sign any pieces of paper."

'Pushing government'

Meanwhile, Crossrail has to negotiate some more committee stages in the House of Lords and Commons before it can get Royal Assent.

If there are no major stumbling blocks, construction on the link could begin in late 2008. Engineers from Arup and Bechtel are already working out of the same offices as Crossrail.

"We have had the support of government and we hope that will continue," says an upbeat Ian Rathbone of Crossrail.

"It is just a matter of sorting out the funding."

Now all eyes are on the government's Comprehensive Spending Review in the autumn, which could well lead to the kind of detail on cost and funding for which all interested parties are waiting.

"We have been pushing government for a number of years now and we hope to see progress on this key issue," says London First's Lauren Preteceille.

After nearly 20 years, it may be that Crossrail joins the other major cross-capital route, Thameslink, in finally achieving financing.

Map of Crossrail route
High-speed link
Planned operational date 2015
From Maidenhead and Heathrow in west
From Shenfield and Abbey Wood in east
Through central London tunnels
New stations at Paddington, Bond Street, Tottenham Court Road, Farringdon, Liverpool Street, Whitechapel and Canary Wharf

Billions pledged for rail upgrade
24 Jul 07 |  UK Politics

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