It could be back to the drawing board for Crossrail funding

Will PFI be thrown over for taxpayers’ money? The decision will be announced after Christmas

The tender process for trains worth £1bn for the Crossrail megaproject, linking Berkshire to Essex through central London, could be thrown into disarray later this month.

The Department for Transport (DfT) and Transport for London (TfL) are to decide by Christmas if the trains should be procured through a private finance initiative (PFI), public funding or a mixture of both. The decision will be announced in January.

The trains were originally going to be bought throughthe private sector, but the bidding competition was deferred in August. Crossrail executives hope to be able to resume the bidding process in January, but they will almost certainly have to start again if taxpayer money is involved.

The review of the process was widely attributed to a separate decision to award a £1.4bn trains contract for the Thameslink project to Siemens, the German multinational, rather than Bombardier, which would have secured jobs in the Canadian firm’s Derby factory. The highly controversial choice was made just two months earlier.

Bombardier is also on the four-strong shortlist for the Crossrail trains, and it was thought the selection criteria would change to benefit the company, ensuring that the Derby site remained open. Siemens is, again, one of the other bidders, alongside Hitachi Rail Europe and Construcciones y Auxiliar de Ferrocarriles.

However, the DfT and TfL’s major concern is whether PFI offers better value for money than funding through the taxpayer. TfL and the London Mayor, Boris Johnson, are particularly sceptical that the private sector can fund the project more cheaply.

A source close to Crossrail said the project should still hit its 2018 deadline, even if train procurement had to start again. Whichever option is selected, the Crossrail team are confident that the trains would be ready by 2016 or 2017, at least a year before the £14.5bn scheme is scheduled to accept its first passengers. However, more bidders could emerge in any new process, meaning that time, money and resources had previously been wasted.

A TfL spokeswoman said: “The original proposal was to procure Crossrail rolling stock under a PFI arrangement. However, when undertaking any procurement, we always keep under review how we can get the best possible deal and other funding options are currently being discussed with DfT, the joint sponsor, to ensure value for money for fare and taxpayers. Funding details will be confirmed in early 2012.”

Crossrail is the biggest engineering scheme in Europe and was designated as one of 40 projects that are “nationally significant” in the revised national infrastructure plan last week. This was released alongside Chancellor George Osborne’s Autumn Statement on Tuesday.