The funding agreement for Crossrail’s overspend will need to be resolved in the next week or two if it is to avoid winding down some of the completion works.
Although Crossrail has enough funding to keep working until next March, the key issue is that the authority to sign new contracts is expected to expire in the next week or two.
The previously agreed £740 million loan facility will keep the project working until March 2021, but within the next couple of weeks, Crossrail will have committed all of its funds within the current £14.97 billion funding agreement. At this point, the project will be no longer be able to make future financial commitments such as signing new contracts and could be forced to wind down its ongoing works.
Crossrail estimates that it requires an additional £1.1 billion to complete the project, above the previously agreed £2.15 billion funding package in December 2018, and TfL is still in talks with the Department for Transport (DfT) to resolve the funding problem.
Even if the funding is approved, if it is not approved before the mid-October cut-off, then Crossrail would face the costs of winding down the project, and later restarting it — but also as many of the contractors could be working for other companies by then, the delays would be magnified while recruiting replacement staff.
TfL’s Commissioner, Andy Byford told the London Assembly last week that TfL has received both verbal assurances from Grant Shaps that TfL itself will be funded, and has a letter of comfort from the DfT to that effect. However, the details are still being worked on, and the Crossrail funding settlement still needs to be agreed.
Last week, direct responsibility for completing Crossrail passed to TfL, and Andy Byford will head the team working on it. He also committed to not seeking any additional funds for Crossrail, above the £1.1 billion that’s currently being requested.
He also said that based on his reading of the papers, and subject to no more Covid related problems, no more delays would be expected to the current “first half of 2022” opening date.