London’s Crossrail Delayed Indefinitely, Handed $1.8 Billion Bailout
(Bloomberg) -- London’s new cross-city rail line has been handed a further 1.4 billion-pound ($1.8 billion) bailout as Europe’s biggest infrastructure project struggles with construction delays.
The Crossrail route, originally due to have opened this month, will also be put back beyond a revised launch date of next autumn that had been set only in August, Transport of London, which reports to Mayor Sadiq Khan, said Monday.
Hitches surrounding completion and testing of the line, the first to span London from east to west, are expected to produce a funding shortfall of as much as 2 billion pounds, according to a study by accountants KPMG. The financial rescue comes less than a week after Crossrail Chairman Terry Morgan resigned from the post and the equivalent role at the HS2 high-speed rail project.
Crossrail is due to lift central London’s rail capacity by 10 percent to 200 million passengers annually, contributing an anticipated 42 billion pounds to the economy. The route -- to be known as the Elizabeth Line after the British queen -- will link locations including Heathrow airport, the West End shopping district and the City and Canary Wharf financial centers.
The Department for Transport has already contributed 300 million pounds in funding, with the additional 1.4 billion pounds to come from the Greater London Authority. A further 750 million-pound loan facility will also be available from the DfT should KPMG’s upper estimates for the shortfall prove accurate.
Tony Meggs, a former BP Plc executive who currently heads the government’s Infrastructure and Projects Authority, will replace Morgan as Crossrail chairman, TfL said.
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