The government may finally give the go-ahead for Crossrail next week, it emerged yesterday, with the Comprehensive Spending Review now expected to be unveiled as soon as Monday.
The green light for Crossrail, one of the largest civil engineering projects in British history, follows a deal agreed earlier this week, in which the City of London Corporation and other London business agreed to meet part of a funding shortfall in the £16bn proposals.
The Corporation is understood to have committed £300m, though contributors are refusing to disclose their funding ahead of the announcement. The deal is based on assumptions that the scheme to build a fast rail line across London to link Heathrow, the City and Canary Wharf would bring huge economic benefits to business in the capital.
However, the long-term benefits of Crossrail, the cost of which will dwarf the £7.5bn spent on digging the Channel Tunnel and the £9.3bn budgeted for the 2012 Olympics, remain difficult to quantify.
Analysts believe the project is economic, provided a long-enough perspective is adopted – working models assume a 60-year lifespan, with an assumed opening date of 2013.
The transport benefits of Crossrail are the easiest to identify. The line would enable a much more rapid transit of people from Heathrow airport and the west of town to the City and Canary Wharf. Transfers from main line trains to London Underground would be abolished, and business people and commuters will reach their destinations faster.
Faster car journeys would follow the reduction of congestion along the M4. Leisure time is assumed in these calculations to have a lower value than business time, and the present value of such savings, over a period of decades, would amount to £16bn. So on those grounds alone, Crossrail, rather neatly, seems to pay for itself, with one-third of that benefit accruing to business journeys and two-thirds to commuting and leisure trips.
Next to arrive are the revenues from the scheme. This implies that some passengers will switch from car to the new trains, which would also involve some loss of tax revenue to the Exchequer; passengers merely switching lines would not increase net revenues.
There is also a positive effect associated with attracting new visitors to London because it will become more accessible, itself a material factor for some. Overall the increase in public transport revenues is estimated at £6.1bn.
Thus the total cost of the scheme, at £16bn should be reduced by the value of the estimated fares revenue to leave a net cost of about £10bn. But chancellor of the exchequer Alistair Darling will still have to find the money.Reuse content