By Richard Johnstone | 1 March 2013
Plans to fund the construction of trains for the new Crossrail line in London using private sector funding have been scrapped after it was decided that the carriages would be paid for in full by taxpayers.
The decision to abandon plans to pay for the carriages using the government’s UK Guarantees scheme would ensure they are ready for the new line opening in late 2018, transport minister Stephen Hammond and Mayor of London Boris Johnson said today.
Johnson had proposed the change to ministers after Transport for London said it would help to ensure that the line could open as scheduled.
The previous proposal for the £1bn Crossrail rolling stock programme included £650m of private sector funding, which was to be guaranteed by the Treasury to ensure lower financing costs, alongside a £350m public sector contribution.
However, as there are no existing trains that could operate through the central London tunnels being constructed for the Crossrail line, it has now been agreed that 100% public sector funding would ensure delivery.
Johnson said this would mean the trains would now be delivered next year.
'Crossrail is now hitting its stride with tunnels being bored and stations being built at lightning pace,’ he said. 'Nothing must get in the way of this fabulous new railway and it is fantastic news that we can now crack on with buying the wonderful fleet of brand spanking new trains.’
Crossrail is being delivered by Crossrail Limited, a wholly-owned subsidiary of TfL, and is jointly sponsored by both TfL and the Department for Transport.
Hammond said that the ‘flexibility’ offered by public procurement would help deliver ‘a very complex and unique infrastructure project within the delivery timetable’.
He added: ‘Any delay in the rolling stock order would place this delivery timetable in jeopardy. By removing the private financing requirement and moving to a wholly publicly-funded procurement the contract negotiations will be simplified and as a result Transport for London believes this will provide greater certainty that the contract can be awarded in time.’
Within the current Spending Review period, the funding for the trains will be found from existing TfL budgets, with costs beyond 2014/15 covered in future capital spending plans, Hammond said.
He added: ‘The Department for Transport remains committed to the use of private finance in transport projects where it provides value for money and fits with our timetables for planned investment.’
A Treasury spokeswoman told Public Finance that the switch would give TfL greater ‘control’ amd 'flexibility' over the delivery of the trains. She added that, despite the change, the £40bn UK Guarantees programme was progressing as planned, with around £10bn worth of projects having prequalified for credit support as part of the scheme.
