With CrossRail having received Royal Assent, the path is laid for the project to begin in earnest. TfL and other CrossRail partners are taking the opportunity to make hay by showcasing an exhibition on the project near Tottenham Court Road Station, itself a major beneficiary of the scheme.
However, warning bells are already being rung. The Telegraph carries an article on the pitfalls awaiting the project, highlighting the loose nature of the funding already set aside. Key paragraphs below:
The DfT is putting up £5.1bn courtesy of the taxpayer, but the rest is less certain. Mayor Boris, via the Greater London Authority and Transport for London, is on the hook for £7.7bn, a big chunk of which still requires legislation. The City of London has promised to cough up £350m - though only £200m is guaranteed - while other companies, including Network Rail and the cash-strapped BAA, must contribute.
It is the Mayor's chunk where there are most moving parts. Some £3.5bn is due to come from a business rates supplement of 2p per pound, expected from April 2010. The Mayor is also banking on a £300m contribution from property developers around Crossrail stations and £300m more from a new statutory planning charge, also scheduled for April 2010.
Then there's a £2.7bn contribution from TfL, which comes out of its £38bn 10-year funding settlement to March 2017. The worry is that, after the collapse of Tube maintenance company Metronet, TfL could be called to plug further funding gaps on London Underground.
The £16bn funding package 'secured' by Gordon Brown suddenly looks perilous when the factors above are taken into account. At a time of economic downturn, when the Government is looking to significantly extend its borrowing, relying on the now-shakey profits of Network Rail, BAA, and property developers for a cash fillip seems somewhat short-sighted.
Boris Johnson has said that CrossRail is a "cracking deal for the capital." One way or another, he may be right. Tony Travers, director of the London Group at the LSE believes that the "money is some way from being in the bag." If some of the projected funding for the scheme does not materialise then one has to wonder which fund will be used to plug the gap - Tube upgrade money, central Government funds, rate increases? At the moment it is not clear.
The Mayor has stated that the planned £30bn Tube upgrade is secure and will not be affected by events caused by the CrossRail scheme. The Guardian reports that all may not be that rosy with these plans either:
According to senior sources, Tube Lines could be facing a funding gap of a similar scale to Metronet's. The PPP contract referee, Chris Bolt, is due to publish his report on Tube Lines' financial needs for 2010 to 2017 next month. The mayor's transport body, Transport for London (TfL), requested the assessment after becoming concerned that both sides are too far apart on how much funding Tube Lines needs - which comes from TfL's budget.
London under Mayor Johnson could find itself in a perfect storm: an under-negotiated settlement for London transport from the DfT; a funding gap at Tube Lines; CrossRail funding issues, and a spiralling Olympic budget.
London needs CrossRail - it's difficult to argue otherwise. By 2017, when the first trains are running on the line, the extra capacity which it offers will be soaked up almost instantly. However, London needs more urgently a cogent and water-tight funding settlement from central Government in order to ensure the security of the myriad projects currently commissioned. A problem with one project cannot be allowed to derail the others, and London's rate payers should not have to shoulder the entire burden given the near 20% contribution to GDP which business here delivers, punching well above its weight.
Also to be considered - to the collective shudders of many - is what should follow next. CrossRail will provide only 40% of the extra capacity which will be needed by 2016. Until launch at 2017 our current transport network will be squeezed, and after the relief after will not be as significant as some have hoped. So what follows? CrossRail 2? An overground solution?
This discussion needs to start now, even if the build may not for another 15 years.