BAA fights £10bn Crossrail Bill over Heathrow Express threat

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The Independent Online

BAA, the owner of Heathrow, is preparing to challenge key sections of the Bill to establish Crossrail, the £10bn rail project linking east and west London.

BAA, the owner of Heathrow, is preparing to challenge key sections of the Bill to establish Crossrail, the £10bn rail project linking east and west London.

The news is a serious blow to Alistair Darling, the Secretary of State for Transport, who had counted on BAA being one of biggest private-sector backers of the rail project.

But the airport operator is incensed by a little-noticed clause in the Bill giving Mr Darling power to seize control of Heathrow Express, BAA's £750m rail link to Paddington.

A BAA spokesman said: "We are concerned at the sweeping powers that the Secretary of State will get as a result of the Bill. BAA has to act in the best interests of its shareholders and to protect the Heathrow Express. We support Crossrail in principle but we feel the proposals put before Parliament don't have any positive benefits."

BAA's lawyers will try to have that section of the Bill nullified by seeking a so-called protective clause that would prevent Mr Darling taking over Heathrow Express.

However, the Department for Transport is expected to reject BAA's proposal because ministers believe its original clause is necessary to see the Bill through Parliament.

Therefore, in the next few weeks, BAA will formally petition Parliament with its objections during the second reading of the Bill, which could force ministers to rewrite sections of the proposed legislation.

The petition would come at a critical time for Crossrail. In early summer, Mr Darling will publish a consultation document on options for funding Crossrail. Central to this will be a special levy on London business rates - expected to be 3 per cent. This would see BAA, London's largest single business ratepayer, forking out an extra £2m a year in taxes to pay for Crossrail.

On top of this, the Treasury and the Office of the Deputy Prime Minister are working on plans for a one-off charge to major property owners along the route of the railway. However, it is understood that an early idea to link the levy to future rises in property values is close to being ruled out.

Canary Wharf Group, owner of the property estate in London's Docklands, is another company expected to help pay for Crossrail. Howard Dawber, Canary Wharf's strategic adviser, said: "We would contribute, so long as it was on an equitable basis."

The biggest Crossrail contribution would come from the Treasury. Tony McNulty, minister of state at the Department for Transport, said it would probably pay £2bn to £3bn. He also admitted that the Treasury would shoulder any cost-overruns by underwriting the project. "There may be different layers involved until you get to the ultimate backer, but for anything this size then it is the Government," he said.

Mr McNulty added: "By any stretch of the imagination, there needs to be an increase in the capacity of London's rail. This is what Crossrail will bring."

There are concerns that Crossrail's project costs could soar. Irving Yass, the director of policy at London First, a big-business lobby group, said: "The figures quoted in the Bill are at 2002 prices. But the cash costs will be very different, as they will take into account rising construction costs and financing costs. The actual amount of money will be substantially in excess of £10bn. It would possibly be over £15bn."