Is the Hidden Overspend By Crossrail, The Final warning we need on HS2?
Some of the biggest contracts on the Crossrail project, Europe’s largest undergound construction scheme, cost up to 255% more than they were meant to, documents reveal.
A breakdown of contracts on the project — a £14.8bn rail link running from Reading and Heathrow in the west to Shenfield, Essex, in the east and Abbey Wood in southeast London — reveals overspending of hundreds of millions of pounds.
Details of 43 contracts seen by The Sunday Times reveal they were awarded at a total cost of about £1.5bn but the final bill was £2.5bn.
In a sign of the sensitivity of the hugely excessive expense, Crossrail initially refused to reveal the figures after a freedom of information request. The company, which is owned by Transport for London, released them only after an appeal to the information commissioner.
Andrew Wolstenholme, chief executive of Crossrail, is one of the best-paid bosses in the public sector, with a package of £946,396, according to the company’s latest annual report.
Crossrail trains will transport up to 72,000 passengers an hour on the new railway for London and the southeast, to be called the Elizabeth line. The tunnelling machines used in the project are more than 450ft long and weigh 1,000 tons.
However, the scheme faces questions over rising costs. Crossrail and the Department for Transport insist that the project is running on time and on budget.
Details of contracts seen by this paper suggest otherwise. For example, the cost of building key sections of eastbound tunnels rose from £479m to £756m. The price of constructing parts of the westbound tunnels rose from £473m to £745m.
A contract to build a new Bond Street station was awarded for £33.2m but the final cost was £95.3m. A contract for a Paddington station upgrade was awarded at £27.6m but the final figure was £98m, a 255% increase.
A contract for construction at Liverpool Street station was awarded for £22.6m. The final cost was £53m. One to move about 4.5m tons of excavated tunnel material to create a new wetland reserve at Wallasea Island in Essex was awarded at £40.6m. The final cost was £69.4m.
The government admits that “cost pressures are increasing across the project”. It says Crossrail is implementing cost savings and forecasts that the line will be completed within budget.
Crossrail said this weekend that some contractors had bid at “unsustainably low values” after the financial crisis and it was not expected that work would be completed for the contract award price, which did not include inflation. In other cases, the scope of the contracts had changed.
The company said it “continues to forecast that the Crossrail programme will be delivered within its £14.8bn funding envelope”, and that “contingency” had been allocated for an increase in the cost of contracts.
It added: “The Crossrail project is over 85% complete, is scheduled to open . . . on time in December 2018 and will be delivered within its £14.8bn funding envelope.”