Transport for London secures £1bn European loan to shore up Crossrail but other projects could suffer
Fears are growing over the future of large Transport for London projects, including the £695m upgrade of Victoria underground station, as the body grapples with a funding crisis.
Sources close to the Victoria redevelopment, which is intended to expand the station by 50%, said TfL was considering postponing the scheme. It is thought that if it does go ahead, it will have its budget capped between 2010, when work begins, until 2012.
The news came as TfL secured a £1bn loan from the European Investment Bank (EIB) to help it finance Crossrail, even though it has not previously admitted that funding for the £16bn scheme was in difficulty. Sources fear that money for Crossrail is being found at the expense of other schemes.
One source said: “Even if Victoria goes ahead, it’s likely to have a budget cap until 2012. It will be a glorified enabling works. With Crossrail, TfL needs to do things by specific dates. There’s no commitment to do that with Victoria.”
Another said: “All major projects are being looked at, and Victoria has been specifically mentioned.”
Even if Victoria goes ahead, it’s likely to have a budget cap until 2012
Source close to the scheme
TfL brought in cost-saving initiatives after the collapse of the Metronet tube consortium in 2007. In June, it announced 1,000 job cuts and postponed 50 station upgrades. It is also locked in a funding dispute with Tube Lines, the surviving consortium, over the cost of its seven-year maintenance programme.
Three teams are in the running to build the Victoria scheme: Balfour Beatty with Morgan Est, Bam Nuttall with Taylor Woodrow and Costain with Laing O’Rourke and Bachy Soletanche. A contract award was due in August, but has not yet been announced.
One source close to the bidders said: “TfL has big budget constraints and it’s under more pressure to do Tottenham Court Road and Bond Street works because of Crossrail. It makes sense that they will take priority.”
Regarding Victoria, TfL said: “Subject to the board approving funding in the autumn, construction can start in 2010.”
The EIB’s Crossrail loan makes up 40% of the £2.7bn TfL is to contribute towards the funding of the project. A TfL spokesman said the body would consider going to the markets and the Public Loans Board for the remaining £1.4bn it needs to borrow.