The outgoing Transport for London commissioner has said he is “as confident as I can be” that no more money will be required by Crossrail Ltd in order to launch the main section of its Elizabeth Line service as early as possible next next year.
Mike Brown, who will step down as TfL chief in May, told the London Assembly budget and performance committee that TfL had “looked to a delay to the later stages of 2021” in its business plan assumptions about when income from the new service will start coming in, but that this reflected a “very pragmatic look at the demand forecasts” and that an “indicative timeline” for the Elizabeth Line’s launch will be revealed at a meeting of the Crossrail board on Thursday.
He added that this assumption was at the “pessimistic end” of the scale and noted that it was not the same thing as Crossrail’s predicted starting date, with the the company’s bosses well aware of the need for “bringing that date forward as much as they can possibly and safely do because of the imperative of getting the revenue flowing into TfL”.
It was announced by Crossrail Ltd’s chief exeuctive Mark Wild in November that the main, central section of the Elizabeth Line will not be ready for service until “as soon as practically possible” 2021, having originally been scheduled to open in December 2018, and that the cost of the project is set to increase by up to a further £650 million over budget to reach £18.25 billion overall compared with an original budget of £15.9 billion. Wild promised “further certainty” about the opening of the line “early in 2020”. Crossrail had previously set a window for the service opening of between October 2020 and March 2021.
Acknowledging that he had said a year ago that an early cash boost of around £2 billion would be enough, Brown referred to the view of Crossrail Ltd chief executive Mark Wild that “the level of disarray discovered was much greater than originally envisaged” when he took on the job in November 2018. In addition to inheriting the challenge of ensuring that different key software systems were compatible, Wild had later discovered that work on a number of Elizabeth Line stations was far from complete.
TfL says delays to the opening of the Elizabeth Line service have deprived it of between £500 million and £700m in lost revenue so far, though this has been made up for with cash reserves and business rates funding. Chief financial officer Simon Kilonback explained to the committee that the latest setback has had further budgetary implications “both in terms of revenue and capital costs”, though this had not harmed the transport body’s credit ratings.
Other difficulties were arising from uncertainties about demand for TfL public transport services, the general state of the economy and “the lack of long-term certainty about our funding from March 2021,” Kilonback said. All of this meant TfL had to “remain cautious” about projects it could safely commit to and prioritise.
Overall, “core elements” of previous business plans had been protected, Kilonback said, including the (lately reduced) distance covered by London’s bus services, funding for local authority schemes and the Mayor’s healthy streets programme, including the ongoing creation of a “city-wide cycle network” with the addition of electric buses to the fleet and the expansion of the ultra low emission zone also still on schedule.
The business plan “continues its trajectory” towards a reduced deficit for this financial year to “about £300m”, Kilonback said. TfL has raised money by selling Crossrail trains already built and leasing them back in a deal that has brought in about £1 billion and selling the historic London Underground headquarters building, 55 Broadway, for £12o million. Kilonback also said that continued reductions in “back and middle office jobs” has factored over £200 million of recurring savings into the plan”.
TfL has, however, “paused the procurement of the Jubilee and Northern Line additional trains and Piccadilly Line signalling and the Holborn and Camden Town “major station upgrades” and also stopped repairing its roads for two years, though this work is now starting again. Rotherhithe-Canary Wharf bridge has also been shelved. Kilonback said the upshot is that TfL is, “Still on track to break even by 2022/23” and then show an operating surplus.
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