MGappraisal-business-case-crossrail.pdf

Crossrail, the largest civil engineering project in Europe, received Royal Assent on 22nd July 2008 and is now being delivered after nearly two decades. Enabling works for the scheme are due to start in the New Year, with the main construction expected to start in 2010 and operational in 2017.1 The scheme is welcome news for the London economy. It will provide at least a £20 billion boost to the UK economy, significant employment during construction and operations, regeneration and new capacity, and much needed crowding relief. However, its journey towards this significant milestone has taken 16 years since the first attempt in the early 1990s; and it was first considered nearly 150 years ago.The old adage, ‘what goes around comes around’, is no truer than with the Crossrail. This article reviews Crossrail’s ancestory and its epic journey to receiving Royal Assent, and discusses future issues.

Crossrail’s ancestory An east–west link across central London is not a modern-day concept. In 1845, a proposal to link the Great Western Railway (GWR) and Great Eastern Railway (GER) was first put forward in 1845, but did not progress.2 In more recent times, some authors have traced Crossrail’s ancestors to the Abercrombie Report, published in 1944, and The London Transportation Study, published 1965.2,10 Although these key reports provide the basis for the scheme, the modern day version of Crossrail was derived from the Central London Rail Study (CLRS)

commissioned by the then Conservative Secretary of State Paul Channon in March 1988.The impetus for CLRS was: overcrowding and congestion experienced during peak times on the national rail and underground networks and the roads, plans to regenerate Docklands; and the need to identify a transport strategy to meet future demand up to 2000.3 CLRS was a joint strategic study between the Department of Transport (DoT), British Rail (BR), London Regional Transport (LRT) and London Underground Limited (LUL). The CLRS report, published in January 1989, examined and provided outline analysis of eight schemes categorised under ‘New underground lines and extensions’ and four under ‘Surface lines run under the central area (or crossrail concept)’. Three projects from the CLRS study were conceived to combat the future congestion problems4: The East–West Crossrail, Cheslea–Hackney and extension of the Jubilee Line.

First time around During autumn 1991, under the Conservatives, the Crossrail promoters deposited a Private Bill to Parliament to obtain powers for the scheme. From January 1992, multiple Government cost-effective and engineering reviews were ordered, which some believe were in a bid to try and stall or even halt the project. Early in May 1994, the bill was rejected by a 2:1 vote, by three conservatives who did not represent London constituencies. It is understood this decision was taken against a backdrop of an

Planning Crossrail

Crossrail has had a gestation period of 16 years’ but at

last it seems finally underway. Dr Mark Gannon CMILT,

lecturer in Operations and Project Management,

University of Surrey, investigates how Crossrail plans

have developed.

Author Dr Mark J Gannon CMILT

Tottenham Court Road Crossrail station plaza design

XVII FOCUSON PLANNING & POLICY

All images copyright Cross London Rail Links Limited.

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economic recession and lower number of passengers entering London, the schemes interference with rail privatisation, and political preference for the Jubilee Line Extension still in its legislative process, and despite Crossrail having a stronger business case.3

Despite this disappointing news for sponsors and the taxpayers’, sunk expenditure was estimated at £150 million3, the Government, according to Schabas5, made a ‘good show of being disappointed’ and requested that the route was ‘safeguarded’ to protect the alignment of the route and prevent development.

Resurrection In 1999, the City of London Corporation, under Labour, resurrected Crossrail in a similar form to that presented to Parliament in 1991. In December 1999, the Deputy Prime Minister, John Prescott, asked the shadow Strategic Rail Authority (sSRA) to carry out a review of issues relating to rail travel on an east–west axis across London. Once again, the impetus for the study was congestion, network capacity, growth and regeneration. The aim of the report was to create a programme comprising of appropriate projects to deliver the capability ‘to create a railway network for London’s status as a world city’.6 The sSRA made nine recommendations, five of which were focused on progressing the Paddington to Liverpool Street Regional Metro scheme from a concept to project definition and support necessary; the remaining four were infrastructure improvements around London’s network.The final recommendation was to conduct a feasibility study into theWimbledon–Hackney line.

What goes around comes around In 2001, Central London Rail Links Limited (CLRL Ltd), a 50:50 joint venture between Transport for

London (TfL) and the Strategic Rail Authority (SRA), was formed to define and develop proposals for a Crossrail link. Central Government provided CLRL with a budget of £154 million to conduct a feasibility study and acquire statutory powers for Crossrail line 1 and line 2, formerly the Chelsea–Hackney line.7

With the disbandment of the SRA in September 2005 and its subsequent engulfment into the Department for Transport (DfT), the Crossrail project was brought under the effective sponsorship control of the Government. A long and short list of options were examined by sponsors between 2001 and 2003, which led to a single option for Crossrail line 1 being identified and taken forward to a Hybrid Bill. Prior to the Government allowing Crossrail line 1 to proceed to submit a bill in Parliament, it called for a review, led by Adrian Montague, of the schemes preferred option and business case.

The Montague Review

The reviewers assessed the realism of the proposals to deliver 24tph and the investment to support this against a background of network interfaces with Network Rail and the required investment on these networks. Once the reviewers had discovered uncertainties with the scope of the business case, other components that are derived from the scope, such as revenues and operating and maintenance costs, were also in doubt.The reviewers questioned the passenger revenue forecasts, especially model calibration, lack of empirical evidence, annualising methodology, risk and quality factors. A key finding from the review was that the business case was not ‘fully deliverable as intended and further work is needed to enable the scheme to be presented to Parliament in a Hybrid Bill,’8

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Crossrail will tackle congestion and the lack of capacity on London’s existing rail network

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The Crossrail Act

After Montague’s uncommitted endorsement, the Government cleverly steered the Crossrail project through to introducing a Hybrid Bill, in the House of Commons on 22nd February 2005, to construct, operate and maintain the scheme.5 The bill left the Commons towards the beginning of December 2007. During this period, it had 466 petitions against the bill. The bill had its first reading on 14th December 2007 and its second on 9th January 2008 in the House of Lords, and had 113 petitions against it.The final reading was completed early July and the bill received Royal Assent on 22nd July 2008.1, 9

Funding

On 5th October 2007, the Prime Minster announced a £16 billion funding package to cover costs and inflation increases for Crossrail.1 The details were published in a Heads of Terms agreement between the DfT and TfL that provides details of future funding and governance arrangements for Crossrail. In essence, the DfT and TfL are responsible for £5.6 billion and the Greater London Authority £7.7 billion; and contributions are to come from British Airports Authority (BAA), the City of London Corporation, CanaryWharf Group and Berkley Homes.1

The scheme Objectives

Crossrail has three objectives8: to support the development of London as a world city, and its roles as the financial centre of Europe and the UK; to support the economic growth of London and its regeneration areas by tackling congestion and the lack of capacity on the existing network; and to improve rail access into and within London.

Route

The Crossrail scheme is comprised of four sections10: a western section, a central area and an upper and a lower eastern section – see Figure 1. In the west, the route runs on existing GreatWestern rail tracks from Maidenhead and Heathrow to Paddington. A new 23km twin-bore tunnel will run under the central London area from Royal Oak to Whitechapel and then branch at a point near Stepney Green into an upper and lower section. On the eastern section, the upper branch will surface at Pudding Mill Lane and then use existing Great Eastern tracks to Shenfield. The lower eastern branch will surface at Victoria Dock Road and then run through to a new tunnel under the Thames resurfacing near Abbey Wood. Tunnels with a diameter of approximately 6m–10m at stations – will be constructed mostly 25–35m below London’s street level and to depths of 35m, 40m and 50m at Hyde Park, Liverpool Street and the Isle of Dogs respectively.10

Trains and trains service

Crossrail’s rolling stock will be 200m long, comprised of 10 carriages each 20m in length, and will have capacity for up to 1,500 seated and standing passengers during peak periods. During these peak periods, Crossrail plans to run 24tph in each direction through the central area, with 12tph during off-peak periods. It is forecast that during 2016, 160,000 passengers will travel on Crossrail during the morning peak, with trains expected to travel up to 100mph on the surface and 60mph in the tunnel.10

New stabling sidings are proposed at West Drayton and West of Maidenhead and Old Oak Common stablings are modified. Trains will be maintained at a new depot that will be built west of Romford station and existing stabling facilities extended at Gidea Park; additionally sidings at Abbey Wood and Shenfield may be utilised.10

Figure 1

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The final Crossrail route

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Stations

Crossrail will serve a total of 35 stations: 14 on the western branch, 7 in the central area, 12 on the upper eastern branch and 2 on the lower eastern branch – again, see Figure 1.The central stations will be new, with 210 m platforms long and two ticket halls; at other stations, further enhancements will be made to accommodate Crossrail trains.

Economic appraisal A scheme appraisal and wider economic appraisal to compare the net costs and benefits was conducted by the CLRL Ltd and submitted as part of the environment statement required for the Crossrail Bill. Such benefits in the scheme appraisal included are: journey time-savings; highway savings; reduction in crowding and ambience and benefits to mobility impaired users. With the July 2004 business case evaluation, Crossrail had a benefit:cost ratio of 1.80:1, 1.63 with optimism bias.11 This was lower than previous evaluations, primarily due to the lower eastern branch terminating at Abbey Wood rather than Ebbsfleet.A benefit:cost of 2.60:1, with optimism bias 2.40:1, was derived for the wider economic appraisal, which included such benefits as employment opportunities and improved productivity and outputs.11

For instance,CLRL estimates that the central area will add 5,000–13,000 jobs in 2006, rising to 23,000–40,000 by 2026.

Discussion Whilst Crossrail provides a much-needed rail scheme for London, there are many issues that need fully understanding.With any major transport investment, concerns will be raised over cost overruns and realisation of future forecasts. CLRL has provided capital cost estimates that include optimism bias to cover the likely eventuality of cost overruns. However, time will tell whether these are sufficient.

With revenue forecast, rail transport schemes are notorious for not being realised, due to their complex nature with forecasting and political nature. In the case of Crossrail, two-thirds of its forecast revenue is from existing operations and a third from new growth, which should provide some comfort. However, the abstracted revenue should trigger financial concerns with TfL on how revenue diverted from London Underground’s Central line and other lines will be replaced. Additionally, there are concerns that Crossrail threatens to reduce funds available for the upgrade of the tube12 and future LRT schemes in London.Of equal concern is the funding for Crossrail. Despite the Heads of Terms published in November 2007 and the political need to demonstrate ‘good economic news’, the press has reported several uncertainties with BAA and the concept of the business levy.13

Cross-section of typical Crossrail platform tunnel

The proposed Bond Street Crossrail entrance

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The Crossrail route has also been severely challenged, especially from the promoters of Superlink Ltd who believe the route does so little for few, despite the £10 billion cost.5,14 Superlink, proposed in December 2004, is a 550km network that would provide regional service from Northampton, Reading, Basingstoke, Guildford, Cambridge, Ipswich, Southend Victoria and Tilbury into London’s main traffic nodes of Euston, Paddington,Waterloo and King’s Cross, connected by a new east–west tunnel through central London. CLRL Ltd conducted a feasibility assessment and appraised the proposal, and concluded there were major issue with its construction, operations and obtaining powers through greenbelt land necessary for construction. However, Superlink’s promoters insist that although it will cost £3 billion more than Crossrail, it will become more than self-financing by generating more passenger revenue due to its far reaching regional services.5

In conclusion Crossrail is a major transport investment that will deliver significant benefit to the UK and London economy, and help maintain London as a world class city and financial centre of Europe. It took nearly two decades to achieve the Royal Assent milestone, and in excess of 100 years to achieve the Crossrail dream’ As is apparent from other major transport schemes, a contributory factor has been the transference of the scheme to the effective control of the Government and the DfT.This action can only assist the scheme being steered through the significant political mire at its height during project planning, the critical project stage at which Crossrail faltered in the early 1990s. Although the visionary Superlink is now probably doomed to the transport history books, its promoters will be looking over the Government’s shoulders. As Dr Prideaux, Superlink Ltd, states: ‘Only one major railway is built in London every 15 years that costs over £10 billion – so it needs to be right!’14

References

1. GLA, ‘Crossrail given the go-ahead by Parliament’, press release, 23rd July 2008, www.london.gov.uk, accessed 24th August 2008

2. FERGUSON, J C, ‘CrossRail: Scope, background and feasibility’, Journal of Transport, Proceedings of the Institution of Civil Engineers, May 2001, Issue 2

3. HEATH, D L, ‘CrossRail: External influences and the way forward’, Journal of Transport, Proceedings of the Institution of Civil Engineers, May 2001, Issue 2

4. Department of Transport, Central London Rail Study, January 1989

5. SCHABAS, M, Paying for Crossrail the Business Case, Institute of Economic Affairs, 2008

6. Shadow Strategic Rail Authority, London East–West Study, 2000

7. Crossrail, Crossrail Line 1 Shortlist Announcement, 7th March 2002

8. Department for Transport, Review of Crossrail Business Case, 2003, www.dft.gov.uk, accessed 20th August 2008

9.The Crossrail Act, www.dft.gov.uk/pgr/rail/pi/crossrail, accessed 24th August 2008

10. Crossrail, Crossrail Environmental Statement, 2005,Vol 1

11. Crossrail, Economic Appraisal of Crossrail, 2005

12. WEBSTER, B, ‘£16bn Crossrail go-ahead threatens to shunt tube upgrade into sidings’, The Times, 14th September 2007

13. CECIL, N, ‘Crossrail backers raise doubts over financing’, Evening Standard, 7th August 2008

14. Prideaux, J, ‘Superlink: a viable alternative?’, The Utilities Journal, March 2005

Author: Dr Mark J Gannon CMILT is a lecturer in Operations and Project Management, within the School of Management, University of Surrey, and Programme leader for an MSc in Operations and Logistics Management. He has gained a wide range of project management, commercial and analytical expertise through working on some of the largest and most innovative transport-based Private Finance Initiative/Public-Private-Partnership projects undertaken in the UK.

Note: The contents of this article represent the views of the author and do not represent the views of the University of Surrey. The author does not accept any liability for its correctness.

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Information

Some of the reports and statements generated in the planning of Crossrail

XXI Planning Crossrail

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