London’s cycle hire scheme is expected to lose almost £35m over the next three years.
Figures provided by Mayor Boris Johnson to London Assembly Member Darren Johnson show the scheme, which was originally promised to be self-funding, will lose £11.6 million in 2013/14.
Further losses of £10.7 million are projected in 2014/15, with loses in 2015/16 expected to total £12.6 million.
City Hall has calculated the losses as the difference between the membership and usage fee receipts and the operational costs per year.
The scheme is proving to be a financial black hole for Transport for London, with construction and runnings costs projected to total more than £225m by 2015/16.
Last year TfL was forced to reveal that less than £14m of the £50m sponsorship money promised by Barclays bank has been received.
In order to plug the gap in the scheme’s finances TfL and the Mayor have announced a doubling of usage fees, a move the Mayor previously revealed would raise an additional £6m per year.
Local councils have also been told that expansion of the scheme into their boroughs is “conditional” on them providing £2m each, despite being asked by Central Government to reduce expenditure.
So far more than £6m has been raised from the boroughs, many of which have sought to pass on the costs to developers via Section 106 agreements, thereby increasing the cost of developing in the capital.
Details of the projects loses were revealed in answer to a written question to Green party AM Darren Johnson.
In his answer the Mayor said: “The recent tariff increase and the expansion to West and South West London later in 2013 are likely to have a significant impact on both income and costs for Cycle Hire, and it is too early to have a full understanding of what these will be.”
TfL has already admitted it has no idea when the scheme will break even.
Commenting on the Mayor’s answer, Assembly Member Johnson said: “These figures are not at all surprising. The cycle hire scheme was unlikely ever to be self-financing – public transport rarely is. But the Mayor should have thought this through before making such rash promises about cycle hire not requiring public funding.”
