Professor Robert Jupe from the Kent Business School comments on the latest setback to the Crossrail project, showing that once again public sector infrastructure projects are prone to major issues.
‘Further problems have emerged with the Crossrail project which may now cost up to £2bn more than initially budgeted. A new bailout was announced yesterday by London’s Mayor, Sadiq Khan, and the Department for Transport. Under the latest bailout scheme, the third this year, the Greater London Authority will borrow up to £1.3 billion from government and provide an additional £100 in funding itself.
‘Crossrail is a very ambitious scheme, which represents the largest infrastructure project in Europe, intended to bring large benefits to London. The flagship underground system, the Elizabeth line, is intended to run from Reading and Heathrow in the west of London through 13 miles of new tunnels to Shenfield and Abbey Wood in east London. The project was originally budgeted at £15bn, and it was planned to carry an estimated 200 million passengers per year and so have a significant impact on reducing congestion for travellers in London.’
‘There have been a series of delays with the scheme, including problems in testing the new tracks and stations and completing the tunnels. A review of the project by the new Chief Executive, Mark Wild, found that the delayed opening in autumn 2019, postponed from December 2018, is no longer viable, and so a new opening date has yet to be set. As Wild commented “there is a huge amount still to do”.
‘The problems with Crossrail raise further questions about the management and financing of public sector infrastructure projects. Sir Terry Morgan, who had been Chair of Crossrail since 2009 and the planned high-speed rail link, HS2, for just four months, resigned last week after extensive media speculation about his future. One lesson to be drawn is that chairing two such complex infrastructure projects may too much for one person. The budgeting process also needs to be examined, as the extra costs of Crossrail mean that other transport projects in London may lose out. The National Audit Office is planning to investigate Crossrail, and can be expected to focus on both management and budgetary issues.’
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