So, first, let’s talk about Cross Rail, a high profile UK rail project, some would say as the precursor and example of how HS2 (High speed Rail) will fare over the next 10 years. Crossrail is a new underground railway, which will be known as the Elizabeth line (purple on the tube map) that will cross London from Reading and Heathrow in the West to Shenfield and Abbey Wood in the East, via Canary Wharf.
Crossrail has an interesting history. It was proposed as long ago as the 1970s, but Cross Rail Limited was first established in 2001. In 2007 Gordon Brown (then prime minister) announced the funding framework for Crossrail, with £15.9 billion set aside to deliver the whole scheme.
The outcome of the Comprehensive Spending Review in October 2010 led to the funding envelope being reduced to £14.8 billion.
In 2018 costs increased to £17.6 billion, and further increased last year to £17.8 billion.
Crossrail: A timeline
2001 – Cross Rail Limited established 2001
2005 – Crossrail Hybrid Bill (Feb 2005 description of works)
2007 – £15.9 billion funding announced in 2007
2008 – Crossrail Act given Royal Assent in 2008 (The Crossrail Act (2008)
2010 – Comprehensive Spending Review revised funding envelope to £14.8 billion
2014 – First series of “The Fifteen Billion Pound Railway” aired
2018 – Funding envelope increased to 17.6 billion
2019 – Funding enveloped increased to 17.8 billion
So how does Crossrail compare with some other recent megaprojects in and around London?
Let’s start with the Olympics project, culminating in the London 2012 games. Just to note that we’re only counting the cost of construction here, and not the cost to actually host the Olympics. According to The Wall Street Journal, the original budget for the Games was increased from £4 billion to about £9.3 billion in 2007. The revised costs included regeneration work to East London and consisted of:
- Building the venues and the associated infrastructure — £5.3 billion.
- Elite sport and Paralympic funding — £400 million.
- Security and policing — £600 million.
- Regeneration of the Lower Lea Valley — £1.7 billion.
- Contingency fund — £2.7 billion.
Another project is the Channel Tunnel which was constructed between 1988 and 1994. In 1985 it was expected to cost around £5.5 billion in 1985 money. The final cost ended at around £9 billion in 1994 (an 80% overrun), which is around £16.75 billion in 2020 (pre pandemic) money. According to Flyvberg, financing costs were 140% higher than previously expected. The cost overrun was partly due to enhanced safety, security, and environmental demands.
Ok, one more project to compare with – the Channel Tunnel Rail Link, now known as HS1. HS1 is a rail line between London St Pancras International and the Channel Tunnel connecting London and Paris, London and Brussels and London and Amsterdam on high speed routes. Originally it was estimated to cost £5.8 billion and would be opened in November 2007. The cost went up to £6.84 billion (18% higher than estimated). The Department for Transport sold HS1 for just over £2 billion
It’s not just cost. These projects bring other benefits. For example High Speed 1 provides faster journey times for passengers, and provides a high speed connection to international routes, connecting London and Paris. It also provided increased rail capacity, regeneration benefits, and additional freight traffic. Interestingly, these benefits haven’t really been evaluated consistently, so the actual benefits aren’t known, according to the National Audit Office.
Crossrail is expected to carry up to 200 million passengers a year.
So why is it delayed and more expensive?
In August 2018, it was announced that the opening of the core Elizabeth Line would be delayed from December 2018 until Fall 2019. In December 2018, that date was also put in doubt, with Crossrail Ltd indicating that a new opening date will be announced after further reviewing the progress of the project. So the crossrail board recently announced that they wouldn’t be able to open the Elizabeth line until 2022. This was jumped on in the media. All the headlines mentioned Covid-19 and the announced delays in the same breath. Although Transport for London did not fully associate the latest delays with the global pandemic.
Delays resulting from the integration of signalling
The delay is principally due to severe signaling integration problems. Crossrail line passes through four different rail signaling systems, and integrating Crossrail’s high tech trains with those systems proved a complex problem that had been underestimated. According to Terry Morgan, the problem lies in a shortage of expertise on systems integration combined with a responsibility gap between Crossrail Ltd, responsible for the construction management of the project, and TfL, responsible for the acquisition of the trains.
This is not a good excuse, from the perspective of politicians. Although the country is keen to get back to work, actually the forecast loss in revenue due to the line not being open has probably benefited from lockdown. The loss in annual ticket revenues for 2019/20 was forecast at £800 million per year, and would likely exceed £900 million a year in 2022.
Benefits of Crossrail – Beyond Money
Crossrail has set high environmental standards.
99.7% of the 8 million tons of excavated material was reused to develop new nature reserves, wetlands, recreational facilities, agricultural and industrial land. Most notable among these is the creation of the Wallase Island natural reserve in Essex in collaboration with the Royal Society for the Protection of Birds (RSPB). The natural reserve has already become one of the most important sites for migrating birds in Europe.
Crossrail’s concrete specification required a minimum of 50% cement substitutes, but this was increased in some sites to over 70%.
Crossrail has set targets for the train cars that equates to 55 g CO2 per passenger-km. Energy efficient LED lights fitted at stations will reduce CO2 emissions by 23,400 tonnes.
Crossrail reduces the journey time from Liverpool Street in the City of London to London Heathrow Airport by 60%.
But crossrail is complex. When the project was originally assessed it had to mitigate the impact of their works with the Olympic Delivery Authority for the London 2012 Olympic Games. In fact it was a key requirement that included a Memorandum of Understanding. They’ve carried out extensive archaelogical digs – Roman ruins, ancient burial grounds, looked a lot at promoting supply chain and procurement, environmental sustainability. It integrates with the existing transport system and includes the creation of 10 new stations amongst the 41 stations being served.
There are other parts of the project that are of huge benefit to the Government’s strategy and approach to future infrastructure projects that have been tested on crossrail.
So is it a success or a failure?
Well, if you ask Professor Pollalis at Harvard University or Rod Sweet editor of journal Construction Innovation and Research, Crossrail, with it’s approach to construction and innovation as well as it’s sustainability strategy, leaves it with a successful legacy.
Upcoming Cost Events
ICEEA continue their successful webinar series with some interesting topics in September:
September 15 – September 16
ACostE are holding interactive webinars online as well, some of their upcoming events are listed below
APM – hold free lunch time webinars:
Other interesting events:
The Cost of Hiring a Private Jet
Covid has crippled the air travel industry. Although flights are happening, a lot of flights aren’t, or have been affected by quarantine periods and holiday cancellations. If my main concern was Covid, would a private jet be a good idea? Well an article by Lee Boyce for ThisIsMoney.co.uk tries to explain the cost.
According to Lee, the demand for chartering planes has soared by up by 300% since the grounding of flights due to Covid. Of course, mostly this is reserved for those with enough money not just to afford these flights or for business travel. But could it be a good idea, in order to have certainty of travel and to avoid cross-infection with other people?
So Lee found out from one charter company how much it would be for a group of four people to travel to Pisa between August and mid-September from London Luton or Stansted. A cool £12,300. And to Mykonos Greece? Around £21,000. So that’s £4,175 and just over £5 grand per person respectively. If you make it a party of 12 that drops to around £1600 per person for Pisa or £2600 for Mykonos. Prices include all taxes, Air Passenger Duty, insurance, catering and fixed-base operator handling. You have your own cabin and space so you would never need to share.
So would I do it? Well, I’m not sure about flying anymore. It’s not a phobia, or the potential risks due to Covid. It’s the impact on the environment of my private travel plans mainly. And the carbon footprint per person is so much larger on a private or charter flight with fewer people. So what are the alternatives? Well, I could offset my carbon impact (there are companies dedicated to that). I could explore more areas of the UK, or travel on a boat. I could wait for 10 years for electric planes.
Not sure how many of you would be in a position to buy a jet, but let’s just say you were thinking about it, at a minimum a light jet would probably set you back £1.5 million. Then, of course, you would need to spend thousands to maintain the thing, staff it and operate it. So fuelling costs, airport landing and handling fees, passenger taxes, crew salaries and training, licenses, etc. Not sure how much parking would cost.. But, one advantage is that you could used it for decades on demand.
Amyas Morse, head of the National Audit Office (The completion and sale of High Speed 1) Available here
Building Information Modelling and Management in Infrastructure Programmes: A Scoping Study in Crossrail A. Stasis, J. Whyte, E. Stephens and R. Dentten Available here
Crossrail -Elizabeth Line, London, UK, The Zofnass Program at Harvard, Prof. S.N. Pollalis, D. Lappas, February 18, 2019 Available here
Flyvbjerg, B., M. Skamris, and S. Buhl. 2002. “Underestimating Costs in Public Works Projects: Error or Lie?” Journal of the American Planning Association 68: 279–295
Damned if they did: A defence of Crossrail, Rod Sweet, Pages 32-38 | Published online: 11 Jun 2019 Available here
Well written. As an economist, it drives me crazy when my non econ friends use cost and price interchangeably.
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