The DfT – and more specifically new Transport Secretary Phil Hammond – appear to have thrown their weight behind Crossrail ahead of the upcoming “emergency budget,” suggesting that Government cuts to the project are less likely than many have thought.
In a press release timed to coincide with a visit by the Transport Secretary to Canary Wharf Crossrail station, the DfT comment:
The Transport Secretary saw for himself visible evidence of the progress made in construction work over the last year. He was impressed at the approach to the work so far, applying innovative technology and construction techniques to drive down costs and reduce environmental impact.
Philip Hammond said:
“I came to visit the Crossrail project today to signal my intention to press ahead with the major improvements in our transport system that business and passengers need. The work being carried out at Canary Wharf is an excellent example of how this can be done in an innovative and efficient way, so that we get value for taxpayers’ money.
“We live in difficult economic times, but that does not mean that we should scrap big projects which would give the economy a vital boost in the future. But it does mean that we must ensure that every pound we invest is well spent. I am determined that this scheme remains affordable – Londoners, business and the taxpayer would expect nothing less.”
Tom Edwards from BBC London was present at the Canary Wharf site visit, and a short interview he conducted with Philip Hammond also features the Transport Secretary speaking positively about Crossrail’s future.
TE: “Some people say ‘just scrap it [Crossrail]. Save us sixteen billion.'”
PH: “The project will deliver huge economic benefits to London that will far outweigh the costs, but of course, in the climate we are facing, every opportunity to engineer out costs and maximise value for the taxpayer has to be taken. The taxpayers of London and the taxpayers of the UK would expect no less.
TE: “Are you guaranteeing it to be delivered in full out to Abbey Wood, out to Maidenhead?”
PH: “We have no plans to change the scope of the project. What we do have a plan to do, and the Mayor and I are exactly as one on this, is that we maximise every opportunity to secure taxpayer value.
That means trying to engineer out cost, trying to manage risk, in a way which ensures that that this project remains affordable.”
TE: “Does that mean the deadline could shift from 2017? We could see the extension to Maidenhead move out to perhaps 2020?”
PH: “Well I think the project is at a relatively early stage at the moment. I know there are still some engineering issues to address, so I don’t want to interfere with that process, but as far as the Department – as the key sponsor – is concerned, we want to see this project delivered, in its entirety, and well with the budget envelope that’s been set by managing the costs throughout.
TE: “But 2017 might not happen?”
PH: “Well that’s not for me to say, that’s not an issue from the sponsors point of view. I think you’d have to speak to some of the engineering people about the engineering challenges and how the timetable looks in that light.”
TE: “There’s a lot of speculation about cuts, about stations being cut. Have their been discussions about that?”
PH: “No. We have no plans to change the scope of the scheme. As I think you know, there is one station at Woolwich which is partly funded by private developers money, and I think that whatever questions that are around that are to be resolved by the project developer, but the rest of the scheme… we have no plans to change the scope of it.”
Particularly notable in the interview conducted by the BBC is the suggestion that rescoping (such as removing Abbey Wood from the equation) is not being considered as an option.
Hammond’s comments on the timing of the project do appear to leave some wiggle-room for cost saving initiatives, but it is tricky to see how these might be realised. Much of the civils work on the project is already underway (or at least contracted), and delays or changes to delivery timescales here would seem more likely to increase, rather than decrease, overall project cost. It will be interesting, therefore, to see whether changes manifest in other areas (such as the Rolling Stock tender) that look to make savings in this way.
Overall, as IanVisits, pointed out in his recent piece on Woolwich station (which Hammond acknowledges is the only station currently under review), scope for Central Government savings with regards to Crossrail are actually relatively limited. £16bn is indeed the “headline” figure for the project, but this includes both risk adjustments and money to be committed by non-Central sources. The Government’s actual commitment to the project is currently closer to £5.5bn, approximately half of which has already been spent. With that in mind, it may well be that central government has recognised that there is very little “bloat” on the project that can be successfully trimmed.
What the new budget truly holds for the project – and indeed what effects not cutting costs from Crossrail would have on other projects such as Thameslink – remains to be seen.
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