Transport for London (TfL) is set to borrow £350m from the Government, as delays to the £15bn Crossrail scheme left it facing a funding shortfall
The Department for Transport (DfT) will provide the money to the mayor, Sadiq Khan, on a short-term basis, with the cost of the loan to be paid out of his budget.
The money safeguards London’s most critical and costly new infrastructure project – but will hugely increase the deficit run up by TfL, currently almost £1bn.
Announcing the loan, Rail Minister Jo Johnson said: “Today, as an interim measure, we are announcing that £350m of short term repayable financing will be made available to the Mayor for the year 2018/19.
“This will ensure that full momentum is maintained behind Crossrail.”
He said that discussions between TfL and government were underway as to how any additional funding will be provided, “with London… bearing any additional costs via a financing arrangement.”
The scheme was due to open next month – but problems with signalling tests put back the date to next autumn.
Johnson continued: “When open, Crossrail will be transformative and carry up to 200 million passengers a year, delivering £42bn of investment into the UK economy.”
Khan admitted the full cost implications were not yet known.
He said the bailout would “allow Crossrail Ltd to continue their construction work and the testing process”.
“An independent review into Crossrail Ltd’s commercial practices, cost projections and governance is already well underway, and that will help us understand the exact implications of the project over running,” said Khan.
He warned: “Some very challenging work remains to be completed.”