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CrossrailCaseStudyProgramme.pdf

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Managing Programmes and Portfolios (MPP) M32494

Case Study: Crossrail

Contents

• Background • Route Map • Funding and Construction Cost • Programme Management • Programme Governance • The Business Case and Benefits • Crossrail Learning Legacy Framework • References

Background

• Crossrail project was the largest infrastructure project in Europe and the largest project in the UK for a generation.

• An east-west link across central London was first proposed in 1845 (Gannon, 2008)

• In recent times long history of development for Crossrail dating back to 1974.

• Private Bill deposited in 1991 to obtain powers to build the scheme despite multiple Government led cost-effectiveness reviews bill rejected early May 1994 and scheme safeguarded (Gannon, 2008)

• Hybrid Bill submitted in House of Commons February 2005 and received Royal Assent (permission to build the railway) on 22 July 2008 (Gannon, 2008)

• Constructing a 118km railway from Reading and Heathrow through London (Paddington, Bond St, Tottenham Court Rd, Liverpool St) and out to Shenfield in Essex and Abbey Wood in Greenwich (Tucker, 2017).

Route Map

The Appraisal and Business Case for Crossrail (2019)

Funding and Construction Cost

• Original construction cost estimate £14.8 billion (2004).

• Public and Private Sector – Public Sector: Central and Local

Government, Tax Payer – Private Sector: Heathrow Airport and

Developers

• 5 October 2007 £15.9 billion funding package announced by the Prime minister Gordon Brown (Buck, p8, 2017).

• Most recent construction cost now estimated £19 billion with an opening in 2022 -mid way through year (Building News, 2020).

• 28% increase in construction costs!

Civil Engineering

Crossrail project: finance, funding and value capture for London’s new Elizabeth line Buck

9.1 Learning point In both of the above cases the risk to both the project and

the developers was significant. The! developer was investing substantial sums of money and e"ort into constructing a railway station that was not going be operational for several years, while failure by the developer to meet deadlines set by the project could result in delays to the critical tunnelling and railway works. Deals of this complexity could not have been done at every station: reaching agreement on acceptable terms required both developer and project to deploy very sophisticated engineering and commercial skills, and each location should be considered on a case by case basis.

More generally, Crossrail was expected to generate development across London. Traditionally, developers seeking planning permission for significant commercial developments would enter into a section 106 agreement with the local authority, serving as

(Figure!4), both of which would experience substantial uplift in the development potential as a result of the railway.

The Canary Wharf Group were early movers lobbying strongly for Crossrail to be built and agreeing first to build the proposed station at Canary Wharf, and also to make a contribution of £150!million towards the cost. In!return, government granted rights for Canary Wharf Group to develop retail and leisure above the station (Figure!5).

Siting a station at Woolwich had originally been rejected on the grounds of cost, inability to provide for freight trains to use the tunnel under the Thames to North Woolwich, and its potential to cannibalise the tra#c generated by the recently completed extension of the Docklands Light Railway to Woolwich.

When the House of Commons hybrid Bill select committee instructed the promoter to provide a station at Woolwich, the Berkeley Group – in the partially developed estate where a station would be sited – and the London Borough of Greenwich collaborated with CLRL to make a proposal to government to construct the station. Initially, the agreement provided for the construction of a station box which would support a residential development above. A!subsequent agreement provided for the cost of fitting out the station to be met between the developer and the sponsors.

Figure 3. Business rate supplement prospectus

Local government Transport for London

direct funding £1.9 billion

Central government Department for Transport direct funding £4.8 billion

Overall funding envelope

£14·8 billion

Business rate supplement, borrowing and direct contributions £4.1 billion

Community infrastructure levy £300 million

Sale of surplus land and property £500 million

Developer contribution £300 million

Fundraising for which Transport for London

is responsible £5.25 billion

City of London committed funding £250 million

Heathrow Airport Limited £70 million

Voluntary funding from London businesses £100 million

Fundraising for which Department for Transport is responsible £480 million

Network Rail financing for work on the existing network £2·3 billion

Figure 4. Final sources of funding

Figure 5. Aerial view of Woolwich Station with Berkeley Homes oversite developments

Figure 1: Final Source of Funding (Buck, 2017)

Programme Management Construction

Civil Engineering Volume 170 Issue CE5

Crossrail project: the execution strategy for delivering London’s Elizabeth line Tucker

Crossrail secured the services of a programme partner to provide the client team with a professional programme, project and engineering management services and to support the oversight and management of the project at the programme level. This contract was awarded in 2009 to Transcend, a joint venture of CH2M Hill, Aecom and the Nichols Group.

Crossrail secured the services of a project delivery partner to take on the day-to-day responsibility for delivery of the central section and its constituent contracts to time, to the desired quality and within the forecast outturn cost, while fulfilling its obligations under the enabling legislation. This contract was awarded, also in 2009, to Bechtel Ltd and its nominated sub-suppliers Halcrow and Systra. The project delivery organisation is shown in Figure 6.

Agreements were put in place with industry partners for the on- network works (Network Rail) and upgrades to the existing London Underground assets (London Underground), Canary Wharf station (Canary Wharf Group) and Woolwich station (Berkeley Homes). Agreements were also put in place with the statutory utilities (Thames Water, British Telecommunications, National Grid, British Gas, etc.) to administer all asset protection and modification works required for existing infrastructure to make way for the new railway.

Crossrail also recognised the need to be able to begin advanced or ‘enabling’ works before the start of the major central section construction.!In 2008, an enabling works management agent contract was awarded to manage the design and implementation for all enabling works, including utility diversions, tra"c management, surveys and other protection works. These works were concluded in 2011.

The architecture of this delivery model has remained intact since 2009 and, while the specific organisational delivery structure for the central section has evolved over time during di#erent phases of the project, the basic tenets of Crossrail’s vision have stood the test

The programme for design, procurement, construction and commissioning of the various stages was set in 2009.! As of the date of this paper, progress has passed 75% complete with a high confidence of maintaining and achieving the staged- opening milestones. Figure!4 provides an overview of the project programme.

5. Overall project management structure

Crossrail’s execution strategy was outlined in the internal document Crossrail Project Delivery Strategy in 2009 and was based on a model in which the overall programme of work would be engineered, procured, constructed and commissioned in a series of projects by Crossrail and its industry partners, third party stakeholders and the supply chain. This was to be accomplished by an integrated delivery team in which Crossrail

! remained responsible for delivery and assurance of the sponsor’s requirements

! entered into agreements with Network Rail, London Underground and other third parties as necessary to deliver the programme

! defined the health and safety, environmental and quality regime under which the programme would be delivered

! managed finance and funding ! defined and implemented the strategies for procurement

of design, construction and other services to deliver the programme

! integrated the overall programme ! established and managed programme-wide public relations ! coordinated optimal insurance for the programme.

Figure!5 shows the programme management structure. A programme director was appointed by Crossrail to lead an

integrated delivery team made up of Crossrail, programme and project sta# and supply chain partners for design, construction and implementation.

2009 Design

Tunnelling

Railway systems

Rolling stock and depot

Civil engineering and station construction

Public space and oversite development around stations

Network rail works

Phased introduction of services

Surveys and enabling works

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 4.!The project’s construction programme extends over 10!years – from work starting in May 2009 to full service operation in December 2019

London Underground

Design consultants

Project partners

Crossrail

Transport for London

Department for Transport

Operator Rail for London (Elizabeth line)

Executive team

Framework contracts

Delivery contracts

Operating contracts

Contractors Train

operating concession

Docklands Light Railway

Canary Wharf Group

Berkeley Homes

Network Rail (on-network works)

In d u st

ry p

ar tn

er a

g re

em en

Integrated team

Sponsor’s agreement

Shareholder agreement

Project development agreement

‘Crossrail project’

Project representative

Joint sponsor team

Rolling stock/depot

Figure 5. Programme management structure

The Crossrail programme is structured to deliver a series of opening stages as follows (Tucker, 2017):

■ Stage 1: progressive introduction of new class 345 rolling stock on existing suburban services between Liverpool Street and Shenfield (May 2017).

■ Stage 2: on-network works between Heathrow and Westbourne Park, including services running at a frequency of four trains per hour from Paddington station to Heathrow (May 2018).

■ Stage 3: Elizabeth line services running between Paddington low-level and Abbey Wood stations (December 2018).

■ Stage 4: through-running of Elizabeth line services between Paddington low-level and both Shenfield and Abbey Wood (May 2019).

■ Stage 5: full Elizabeth line service from Reading and Heathrow through the central operating section to Shenfield and Abbey Wood (December 2019).

Figure 2: Provides an overview of the project programme ( Tucker, 2017)

Programme Management