The delayed opening of Crossrail is to cost London tax and farepayers at least a further £350m.
Passenger services were originally due to start in December of this year but, in August, the project team, City Hall and Transport for London announced the opening would be delayed until “Autumn 2019.”
The project is already running almost £600m over budget and the delay means costs will now rise further.
Funding for the scheme was discussed earlier this week at an emergency meeting of the Transport for London board, most of which was closed to the media and public.
The full financial impact of the delay has yet to be confirmed, but on Friday transport minister Jo Johnson announced the government would make available a £350 million “short term” loan for the year 2018/19.
He also confirmed that “discussions between TfL and government are underway as to how any additional funding will be provided, with London – as the primary beneficiary of Crossrail – bearing any additional costs via a financing arrangement.”
His comments echo a warning from the Department for Transport’s permanent secretary who told MPs earlier this week that London would “have to find a way of bearing the cost” of the delay.
Addressing the Public Affairs Committee, Bernadette Kelly said: “We’ve already made a very significant contribution, and we are now in discussions with TfL about how any further costs should be born.
“But there is an acceptance in TfL that there is an onus on London to ensure that it is bearing a very fair share of these additional costs.”
The cost overrun is likely to cause severe problems for TfL which is already facing a squeeze on its finances due to the removal of government grants and the impact of Mayor Sadiq Khan’s four year fares freeze.
The agency will also now miss out on commercial and fares revenue associated with Crossrail.
Welcoming today’s confirmation of the loan, TfL commissioner Mike Brown said the money “will go towards Crossrail Ltd completing the final fit out of the tunnels, work on stations and the extensive safety and reliability testing needed for the new systems.”
He added: “We have commissioned independent reviews into Crossrail Ltd’s governance and financing to ensure its projections are robust. These reviews are being carried out by KPMG and once this work is finalised a full financing agreement will be developed by the Government and Mayor of London.
“Once opened the Elizabeth line will transform travel across London, boosting the economy by billions of pounds and supporting thousands of new jobs and homes in London and the South East.”