Private funding for Crossrail train procurement scrapped

5 March 2013

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5 March 2013 | Adam Leach

New trains and maintenance facilities for the Crossrail project will be fully funded by the taxpayer after plans to split the investment with the private sector were scrapped.

The total cost of around £1 billion was due to be paid with a public sector contribution of £350 million and a private sector investment, backed by a government guarantee, of around £650 million. The involvement of the private sector has now been abandoned to speed up the process of securing the required capital, so a deal for the trains and services can be secured in 2014. The change in financing will not affect the current tender, as documents had reserved the right to make changes to the procurement.

Crossrail is Europe’s biggest construction project, building a new railway line between Maidenhead in Berkshire and Heathrow in the West, and Shenfield in Essex and Abbey Wood at a cost of £16 billion.

Stephen Hammond, parliamentary under-secretary of state for transport, said: “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 Transport for London believes this will provide greater certainty that the contract can be awarded in time.”

Labour's shadow transport secretary, Angela Eagle MP, called for the government to disclose what additional costs arose from having to change the procurement approach. “The government must come clean and admit how much of taxpayers’ money was wasted on the abandoned model of procurement and whether they will be forced to compensate bidders for their own additional costs,” she said.

Due to the requirements for the Crossrail project, existing trains cannot be used, so brand new trains must be manufactured. Mayor of London, Boris Johnson, 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.”

In a separate announcement, made yesterday, it was revealed the Crossrail project is generating enough work to support the equivalent of 55,000 full-time jobs through the supply chain. Other figures revealed that 43 per cent of businesses winning contracts for the project are located outside of London and 58 per cent of businesses in the supply chain are SMEs.

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