Delays, overruns and a £2.6bn bailout: How Crossrail came off the tracks

If all had gone to plan, the first paying passengers to travel through Crossrail's 13-mile tunnels, 40 metres beneath the streets of central London, would have been climbing aboard this month.  

The ambitious scheme, one of the biggest infrastructure projects in Europe, is projected to add £42bn to the economy and bring 1.5m extra people within a 45-minute commute to central London.

But on Monday, after a series of delays and setbacks, authorities confirmed it is likely to run billions of pounds over budget and they can no longer say with any confidence when it will be ready to open.

The problems have sparked a political row, will pile pressure on the already squeezed finances of London’s transport authority, and leave businesses in the capital facing a tax hike.  

Crossrail, which will be known as the Elizabeth Line when it finally gets up and running, has been decades in the making.

The idea of a major east-west rail link to complement London’s ageing tube network was first floated as long ago as the Second World War and the term “crossrail” initially appeared in planning documents in 1974.

Today’s scheme was approved by parliament 10 years ago and spades first entered the ground in 2009 as construction began at Canary Wharf station.

While there have been a number of stumbling blocks along the way, from planning disputes to unfounded fears of an anthrax-infected plague pit beneath one of the new stations, it was only this year that signs of major trouble began to emerge.

In July the Department for Transport, Network Rail and Transport for London (TfL), the capital’s transport authority, injected £590m into the scheme to help it cope with mounting costs.

The following month, and less than six months before Crossrail's underground central section was due to be up and running, TfL revealed that delays in building some stations and fitting out and testing signals in the tunnels would put back the launch to next Autumn.

Simon Wright stood down as Crossrail’s chief executive after just eight months in October, weeks after the Greater London Authority (GLA) agreed a £350m loan to top up its budget for the short-term. Its chairman Terry Morgan followed suit last week.

On Monday it emerged that the delays are likely to add as much as £2.6bn in costs to the project, including £600m of lost revenues previously forecast by TfL. 

While some of that will be covered by money raised earlier in the year, the GLA has been forced to tap the Government for a loan of up to £1.3bn as well as injecting an extra £100m of its own cash. The Government has agreed to loan TfL a further £750m if necessary. 

The larger loan will be funded by London businesses via the Mayoral Community Infrastructure Levy, a tax on property developers, and a business rates supplement.

To top it off, Mark Wild, Wright’s replacement, has said he “cannot commit” to the current Autumn 2019 deadline until he has finished a review of the project.

Richard Steer, chairman of construction consultancy Gleeds, says that on a scheme of Crossrail’s scale, such delays and cost overruns should not come as much of a surprise.

“These major infrastructure projects are very complex and while everybody sets off with the best of intentions there are bound to be delays, variations, unknowns that are encountered as the project progresses,” he says.  

The fallout has led to a political blame game, however. Khan has accused the previous management of keeping him in the dark about the delays, but Morgan is adamant he told the mayor of his concerns as early as July.  

"I haven't hidden my anger and frustration about Crossrail being delayed," Khan said on Monday. "It has been increasingly clear that the previous Crossrail Ltd leadership painted a far too optimistic picture of the project's status.'"

It is a fresh blow to transport secretary Chris Grayling, who has already faced criticism for his handling of problems with a number of mainline rail franchises and a botched timetable rollout in May. 

Given that most of the work is already completed, the impact of the delays on key contractors such as Kier Group, Ferrovial and Costain is likely to be muted.

But the £600m of revenue TfL expects to miss out on over the next five years will further stretch its finances. It is already suffering thanks to a fare freeze introduced by Khan, the end of a grant it used to receive from central Government, and falling passenger numbers.  

David Leam of business lobby group London First worries the extra costs will delay other upgrades such as new trains on the Piccadilly Line and work to expand congested stations.

It could also make plans for "Crossrail 2", a proposed north-south route, more politically difficult. 

Many businesses in the capital are privately annoyed about the delay, which will mean they have to wait longer to access a new army of potential commuters and consumers in the home counties, Leam adds.

“But most will be reasonably sanguine. We have waited literally decades for Crossrail. If we have to wait another year or two, then we’ll just have to do that.”