Canary Wharf in cash aid pledge to CrossRail project

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Nice place, Canary Wharf. Shame about the transport

Property company Canary Wharf has pledged to dip into its reserves to help fund CrossRail, the £5.5bn east-west London rail project, if the line is diverted to Docklands.

The move represents a significant boost to the campaign, backed by the London Mayor Ken Livingstone, to have the link extended to the East London development.

Robert John, Canary Wharf's transport adviser, said: "Would we contribute towards the development of the route? If the scheme [to collect the money] were equitable then we would find it difficult to say no."

Canary Wharf is rivalling the City as Britain's financial centre. Future tenants will include Citigroup and HSBC and 41,000 people work at the Wharf. Having CrossRail diverted to the Docklands site at an estimated cost of £1bn would significantly enhance the estate's property values.

Mr John added: "CrossRail is important to Canary Wharf, but not critical. We, of course, recognise that significant benefits would flow to us."

Canary Wharf paid £145m towards the Jubilee Line Extension. Over 24 years it will contribute £500m to the line.

If CrossRail gets the go-ahead, the service could be running in 2011. The proposal, in its present form, would link Heathrow Airport, Paddington Station and Liverpool Street Station.

On Tuesday, Mr Livingstone is expected to make the case for CrossRail running to Canary Wharf at a Greater London Authority (GLA) public meeting. The GLA's Spatial Development Strategy in May mapped out how the Mayor would like to see London grow over the next 20 years. Canary Wharf sent three reports to the Mayor showing how a CrossRail extension would fit in to the wider regeneration of London.

Jim Steer, managing director of the transport consultant Steer Davies Gleeve and author of one of the reports, said: "The big battle won't be at Canary Wharf. It will be finding ways to extract a contribution from property developers in central London who will benefit from CrossRail. The answer is to get an accord with the GLA and the local authorities.

"If they permit higher-density development on the CrossRail site then some form of support could be sought for CrossRail, in effect a form of planning gain."

Another way to lever in private money would be through a tax on the increase in property values, triggered by the new rail development. But Canary Wharf's Mr John warned against this. "My personal opinion – and this is not a corporate view – is that this would represent a form of development land tax."

Both ways of collecting money from the private sector would require the support of London local authorities. But already there are signs of dissent. Earlier this month Sir Robin Wales, leader of Newham Borough Council was said to have reservations over a CrossRail extension to Canary Wharf.

And the Corporation of London, an old adversary of Canary Wharf, has yet to reveal its hand.