§ The Secretary of State for Transport (Mr Alistair Darling)On 14 July last year I announced I had received business case proposals for the east-west London Crossrail project from Cross London Rail Links (CLRL) and that I was establishing an expert team to assess them. On 9 September I announced that Adrian Montague had been appointed to lead the review.
The Crossrail team had the following terms of reference:
- (i) To establish the full cost of Cross London Rail Link's July 2003 Crossrail business case proposals, and to assess:
- (ii)
- (a)whether they are likely to deliver to time, scope and budget;
- (b)whether the business case proposals will offer value for money;
- (c)the extent of Government funding that can be justified;
- (d)the proportion of the funding required from non-Government sources.
- (iii) To identify any means of delivering a Crossrail project which offer better performance than the business case proposals against tests at (ii) (a)(d) above.
- (iv) To report to the Secretary of State as soon as practicable.
I have studied the Montague findings closely. They broadly confirm the CLRL proposals, but indicate scope for important improvements. I am publishing the report today.
I have confirmed on many occasions the Government's support for the principle of building a new east-west Crossrail link. Indeed, as the Prime Minister says in his foreword to my transport strategy document today, Crossrail is a project that we want to see delivered.
In light of the Montague report, and the Government's analysis of what needs to be done to give effect to the suggested improvements, I am now confident that Crossrail should proceed, although a major funding challenge remains and I shall return to that later. I intend that appropriate powers for the construction of Crossrail should be sought by means of a hybrid Bill to be introduced in Parliament at the earliest opportunity.
24WSThe Montague report finds that, while some individual cost and revenue elements may be queried, CLRL's overall indicative cost for the scheme they propose, some £10 billion at 2002 prices, is broadly correct. It would appear to deliver acceptable value for money and provide an effective vehicle to support the Government's regeneration objectives and the creation of sustainable communities both in the Thames gateway and elsewhere, though there is scope for debate about the level of wider benefits that might be realised.
While the review concluded that there were no pivotal problems with CLRL's proposals, there were nonetheless areas of doubt. In particular, the review questioned whether CLRL's scheme could be operated at the planned high train throughput levels, given the multiple interfaces between Crossrail and the national railway network. The review also questioned the capacity of the construction industry to tackle such a large project in one go, and the suitability of CLRL's current governance structure to delivering the project.
In aggregate, these concerns create significant uncertainty. Some doubts reflect the nature of a scheme at this stage of its development, and could be expected to be resolved as the design matured, but others—not least those above—are more enduring. As a result, the review could not confirm the deliverability of the CLRL business case proposals as they stood. Montague made suggestions for further work and improvements. I have set in hand the further work needed to ensure that these areas of concern are satisfactorily addressed.
As provided for by its terms of reference, the review considered alternative ways of delivering a Crossrail project. Specifically, it explored a number of options based on a Paddington-Liverpool Street tunnel that runs broadly along the line of the currently safeguarded central route. All of these represented less extensive schemes than that initially proposed by CLRL and would enable a Crossrail project to be delivered at lower cost. They would also overcome some of the potential interface, capacity and deliverability problems identified above. In particular, although reliability questions arising from multiple interfaces should be substantially alleviated once Network Rail's plans for improved performance on the national railway show results, reducing the number of interfaces between Crossrail and the wider rail network would clearly bring advantages.
On the basis of the review's work, it is clear that the case for a limb to Richmond/Kingston is relatively weakly developed, and that an extension on the western side to Maidenhead might provide a better solution. This would be a key change, and would align directly with key review concerns about the scale, and deliverability of the project and number of interfaces it has with the national railway. I am today inviting CLRL to bring forward as soon as practicable confirmed route proposals for which powers should be sought in the hybrid Bill.
CLRL have already asked me to update the safeguarding directions for the central section of its proposed route, replacing the existing ones from 1990 and 1991, which are somewhat out of date. Updating the safeguarding directions would not only protect the 25WS route, but also allow affected property-owners access to compensation via the statutory blight provisions. Accordingly, I will now issue safeguarding directions forthwith for the central section of CLRL's plans. Subject to due process, including the necessary consultation with local authorities, I would expect to safeguard the rest of the route, including access for the Thames gateway.
The review also explored ways of funding and financing Crossrail, including by means of alternative funding mechanisms and a novel stakeholder equity concept, which would involve using a fares supplement to provide passengers with a real stake in the future of Crossrail and to offer protection against project cost overruns. While this is a highly innovative idea that is worthy of further consideration, the potential to use fares as a buffer against cost overruns is limited. It would need to be considered in the context both of the existing fare level and pressures on fares more generally.
The Montague report makes clear the scale of funding challenge that Crossrail represents. As I explained in my statement last year, those who benefit from Crossrail should contribute substantially to its delivery. The Montague report confirms the likely availability of funds through alternative funding mechanisms but notes that these are not nearly enough to close the very large funding gap. Further work therefore needs to be done to develop a funding solution that is equitable to all parties, and which can successfully deliver a London project of such importance. My Department and HM Treasury will take this forward, working with the Mayor and the London business and finance community. This will include consulting on appropriate alternative funding mechanisms before next Summer, so that those who benefit from Crossrail are in a position to contribute as fully as possible to meeting the costs.
A key element of a robust project funding plan would be an effective mechanism to ensure that those bearing the risks of the project have proper control of it. In due course, control of a London-based scheme such as Crossrail should lie with London interests directly. However, as the review's report also makes clear, CLRL's current ownership structure is unlikely to provide an effective basis for the robust project governance that will be required initially for the management of the hybrid Bill, and then for the construction of the Crossrail itself.
Accordingly, I propose to reform Crossrail as a joint venture company between my Department and Transport for London, at least for the purposes of seeking and obtaining the necessary powers. The Secretary of State will appoint, with the agreement of the Mayor, an independent chairman of CLRL, who will have a casting vote on the board of the company. This will ensure that CLRL's Board has the clear decision-taking capability that the current deadlocked structure lacks. TfL will be involved in all aspects of the progress of the Bill and Crossrail could subsequently be transferred for TfL implementation.
The Crossrail concept has been around in one form or another for many years and commands considerable support from business and the travelling public alike. It has the promise to improve significantly travel into and across the centre of the capital and also to deliver wider benefits, in particular to the east of London. The 26WS Government's decision to proceed with this project after decades of prevarication represents a significant milestone in the history of London as we seek to build a transport system fit for the twenty-first century.