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Completing Crossrail

In a report, published recently (03 May 2019), the National Audit Office (NAO) states that Crossrail is past the point of no return; nearly £16 billion has been spent, tunnelling was completed in 2015, trains have been ordered and some are already in service.

The way Crossrail has been delivered has driven unnecessary costs and damaged public value. Until the Elizabeth line opens it is not possible to determine the overall value for money for taxpayers. In April 2019, Crossrail Ltd announced that it plans to introduce Elizabeth line services on the central section between October 2020 and March 2021. However, Crossrail Ltd has not yet completed its assessment of the impact of this opening schedule on costs and it is still unclear when the full Elizabeth line service will start. Crossrail Ltd must now focus on completing its plans and delivering against them.

In February 2019, the NAO published a memorandum on Crossrail for the Public Accounts Committee (PAC) which examined the project’s overall progress, costs and potential for future delays. PAC concluded that final costs remained uncertain and that there was no date for when the railway would be fully operational.1

In the recent report, the NAO has further identified how the programme ran into difficulty, which has so far led to £2.8bn of additional financing for the programme, including around £2 billion of loans from the government to the Greater London Authority and Transport for London. A compressed schedule, the contractual model, the loss of downward pressure on costs, and the absence of an achievable plan were set against an atmosphere where “can do” became unrealistic.

The programme has been dominated by a fixed completion date of December 2018 set by Crossrail Ltd and the joint sponsors, the Department for Transport (the Department) and TfL. This date drove much of Crossrail Ltd’s decision making. Aiming for December 2018 meant multiple activities ran in parallel.The delivery approach, delays to some contracts and the decision to set and then stick to the December 2018 opening date, increased risks.

Despite this deadline, Crossrail Ltd did not start to produce a sufficiently detailed delivery plan against which to track progress until late 2018. Consequently, Crossrail Ltd had a gap in its understanding of delivery risks and the likelihood of meeting the December 2018 opening date.

By 2015, problems started to emerge on Crossrail and opportunities to change approach were missed. The sponsors had few effective contractual levers to enable them to take action as they had provided Crossrail Ltd with a high degree of autonomy to deliver the programme.  

Changes required to the design and to contractors’ delivery schedules has increased costs on most of the 36 main contracts. These changes resulted in increased contract costs of around £2.5 billion between 2013 and 2018, of which £900 million was through the renegotiation of contracts to settle historic contractor claims.

Pressures on the programme continued to escalate through to the end of 2018. Between February 2017 and December 2018, for example, the forecast final cost of the contract to install track and key systems in the tunnels increased by 80% from £532 million to £956 million.  

Crossrail Ltd also made decisions that drove unnecessary cost.In early 2018, Crossrail Ltd began carrying out train testing and construction activity in alternating time periods, to allow for early sight of potential train and signalling system issues. However, this testing was of limited use and took any spare time and space from construction workers on site. Crossrail Ltd also reduced the size of its central programme and risk management teams during 2018, in anticipation of the programme reaching completion in December 2018. It is currently attempting to rehire these personnel.  

“Throughout delivery, and even as pressures mounted, Crossrail Ltd clung to the unrealistic view that it could complete the programme to the original timetable, which has had damaging consequences. DfT and TfL must support the new Crossrail Ltd executive team to get the railway built without unrealistic cost or time expectations. While we cannot make an overall assessment of value for money until Crossrail is complete, there have been a number of choices made in the course of this project that have clearly damaged public value.”

Amyas Morse, head of the NAO

Notes for Editors

Key facts

£14.8bn
funding agreed for Crossrail in 2010, including contingency

£17.6bn
current total funding package for Crossrail, including contingency, an increase of 19%. As at March 2019 Crossrail Ltd expects the overall programme to cost around £17 billion

£2.8bn 
increase in available funding for the Crossrail programme to cover cost increases and remaining risks

October 2020 to March 2021
revised target period for opening services on the central section of the Elizabeth line

Yet to be announced
opening date of full Elizabeth line services

December 2018
date, announced in 2010, when the Crossrail sponsors and Crossrail Ltd expected to start running services on the central section of the railway

£600 million
assumption in 2018 Transport for London’s (TfL’s) business plan of revenue losses to Transport for London (TfL) between 2019-20 and 2023-24, as a result of delays to the opening of Crossrail services. To be reviewed in line with opening dates announced on 25 April 2019

£2.5 billion
increase in the cost of contracts between 2013 and 2018 due to design  and contract changes 

£2.05 billion
value of loans from HM Government to London, including £1.3 billion to the Greater London Authority and £750 million as contingency to TfL to cover the increased cost of Crossrail

  1. In February 2019, the NAO published a memorandum on the Crossrail programme to support Parliamentary scrutiny of Crossrail in light of events that transpired during the second half of 2018. Following an evidence session , the Public Accounts Committee (PAC) published a progress review inquiry on Crossrail in April 2019. 
  2. The Department for Transport jointly sponsors, with Transport for London, for the Crossrail programme. This will deliver a new railway, including a 26 mile tunnelled section beneath central London and 10 new, bespoke stations, to be known as the Elizabeth Line. New rail services will operate on the line between Abbey Wood and Shenfield to the East of London, and Heathrow and Reading in the West.
  3. Press notices and reports are available from the date of publication on the. Hard copies can be obtained by using the relevant links on our website.
  4. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.

Contact

NAO Press Office 
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

 

Channel website: https://www.nao.org.uk/

Original article link: https://www.nao.org.uk/press-release/completing-crossrail/

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