Consortium London and Continental Railways (LCR) has emerged as the favourite to oversee the £10bn Crossrail scheme, which was given government approval on Tuesday

Industry sources said the team, which includes contractor Bechtel, engineer Arup and consultant Halcrow, was well placed to bid for the project, given its experience on the £5.2bn Channel Tunnel Rail Link.

A senior rail industry source said LCR would be able to capitalise on the work it had carried out at Stratford, east London, and Ebbsfleet, Kent. He said it was already lobbying Crossrail making exactly these points.

The source said: “LCR is basically already working on the Crossrail route by working on the CTRL. It wouldn’t have to start from scratch, it would hit the ground running.”

He added that there were commercial benefits to selecting LCR as the consortium had come up with commercial development solutions on areas next to the CTRL route that enabled them to cut costs.

The speculation comes despite concerns over the scheme’s funding – it will only receive £2bn from the government. Serious caveats were also raised in a government-commissioned review by Sir Adrian Montague, chairman of British Energy, published on Tuesday.

The 83-page report expressed doubts over the industry’s capacity to deliver Crossrail.

The report says: “Crossrail would make considerable demands on the industry and it is not clear whether the necessary capacity exists.”

It recommended that two surveys be carried out before a final decision to press ahead with the scheme is taken.

LCR would hit the ground running

Senior rail industry source

The first would look at industry resources bearing in mind other major projects, such as Thameslink 2000 and the East London line extension – details of which were released in a white paper on Tuesday (see graphic). The second study would look at likely future industry prices.

The report also said that the procurement route for building the scheme, whereby the private and public sectors would share risk, would not provide value for money.

It said: “The level of risk transfer to the private sector would be relatively low. The public sector would retain a large part of construction cost risks and would have to pay for any cost overruns.”

The report recommended that Cross London Rail Links, the joint venture proposing the scheme, set target price contracts for the job and put robust client and project management arrangements in place.

The central section of Crossrail is now predicted to be delivered by 2013 at the earliest – a year too late for the 2012 Olympics.

London’s bid for the games relies heavily on the provision of improved transport links.

Key points of the transport white paper

  • £340m of extra funding to Transport for London to enable the East London line extension to go ahead and to help the Olympic bid

  • Three tram or light rail schemes – in Leeds, southern Hampshire and an extension to the Manchester Metro – to be scrapped because of cost escalations

  • Britain’s transport networks to benefit from average annual increases of 4.5% over the next three years, up to £12.8bn by 2007, as well as an additional £1.7bn transport reform package, over and above previous plans for 2005-07