Letter reveals scale of cost-cutting as fears grow that Crossrail interchange could be axed

Transport for London has put all new projects on hold, as the body fights a battle to save its £300m planned rebuild of Bond Street station, a key part of the £15.9bn Crossrail project. TfL commissioner Peter Hendy wrote to staff on 15 July saying all “new projects” would be put on hold until “at least” the finalisation of TfL’s budget following the autumn Comprehensive Spending Review.

The letter, obtained by Building, also says that all existing projects and programmes will be put under review and “where practicable paused until the funding position is clear”.

The move comes as decisions on funding for a number of projects are still to be made, including the £300m revamp of Bond Street. TfL had planned to invest £1.8bn on tube, road and rail improvements in 2010.

However, a senior source close to the project said TfL was working desperately to save the station upgrade. The source said it was working up estimates of the costs of stopping, delaying or continuing both Bond Street and Tottenham Court Road projects, to enable it to persuade the Department for Transport (DfT) to allow the projects to go ahead.

The source said: “Bond Street is really under the cosh. But TfL is a long way through the design process on it so they’re asking what are the costs of stopping it immediately, or what the options are for slowing the process down.”

The revamp of Bond Street would create a link with the planned Crossrail station there, and help to deal with increasing passenger numbers resulting from the Jubilee line upgrade.

TfL said that, despite the Hendy letter, a decision between three shortlisted contractors for Bond Street would still be taken this summer as planned. The three consortiums are: a Taylor Woodrow/Bam Nuttall joint venture, a Laing O’Rourke/ Batchy Soletanche/ Costain joint venture, and Balfour Beatty.

Last week, transport secretary Philip Hammond admitted he was considering “contingency options” to reduce costs on Crossrail, which sources suggested included looking at whether Bond Street station was required.

It is seen as very unlikely that Tottenham Court Road will be cut, not least because contractors BAM Nuttall and Taylor Woodrow are already on the ground on the £500m job.

Sources said that TfL management were determined to find efficiencies to stave off drastic programme cuts, but that the £695m Victoria station upgrade could also be delayed.

TfL said that both Tottenham Court Road and Bond Street would be built “as planned”. It said: “TfL has a relentless focus on securing more efficiencies, and providing further clear value for money. As part of that, we have implemented these additional controls over expenditure.

“Investment in vital transport improvements and services, such as the Tube upgrades, Crossrail and the bus service, continues.”

Hendy’s letter

Hendy says “it is only right that we take some interim steps until our funding position is clarified” and adds that tight controls should be “enacted immediately until further notice”. Measures include:

  • Extending the remit of a project review group to cover existing projects worth more than £1m, compared with £5m previously
  • No management consultancy unless significant savings can be proved
  • Recruitment only allowed in “exceptional cases”
  • No colour printing or lunch expenses.