Page last updated at 09:58 GMT, Wednesday, 13 August 2008 10:58 UK

Major projects rising cost fears

Crossrail - artist's impression
Crossrail will cost about 5.5bn

Major building projects such as Crossrail and those linked to the 2012 Olympics could be delayed or cancelled because of rising costs, a report said.

Raw materials and labour costs have risen by 12% in the last year, the Royal Institution of Chartered Surveyors (Rics) study showed.

It said rising fuel and cement costs were having a dramatic effect on civil engineering projects.

Other affected projects could include Thameslink and the East London Line.

The 16bn Crossrail scheme, which will link Maidenhead in Berkshire to Shenfield in Essex, via central London, is due to be completed in 2017.

Serious threat

More than 5.5bn of government money is being put behind the venture.

The 5.5bn Thameslink project which will modernise the rail service and Transport for London speding 1bn to expand the East London Line from Whitechapel north to Highbury & Islington, and south to Crystal Palace and West Croydon.

Overall, with infrastructure output predicted to rise by 9% in 2008 and 7% in 2009, the industry is "well placed" to ride out the current economic downturn, said Joe Martin from the Rics.

"However, the industry is facing the possibility of a serious threat, caused by a combination of rising costs and the economic downturn, that could result in delays and, at worst, cancellation of some of these schemes," he said.

MPs pass Crossrail project bill
23 Jul 08 |  London

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