In a report, published today, the National Audit Office (NAO) states that Crossrail is past the point of no return; nearly £16 billion has been spent, tunnelling was completed in 2015, trains have been ordered and some are already in service.
The way Crossrail has been delivered has driven unnecessary costs and damaged public value. Until the Elizabeth line opens it is not possible to determine the overall value for money for taxpayers. In April 2019, Crossrail Ltd announced that it plans to introduce Elizabeth line services on the central section between October 2020 and March 2021. However, Crossrail Ltd has not yet completed its assessment of the impact of this opening schedule on costs and it is still unclear when the full Elizabeth line service will start. Crossrail Ltd must now focus on completing its plans and delivering against them.
In February 2019, the NAO published a memorandum on Crossrail for the Public Accounts Committee (PAC) which examined the project’s overall progress, costs and potential for future delays. PAC concluded that final costs remained uncertain and that there was no date for when the railway would be fully operational.1
In today’s report, the NAO has further identified how the programme ran into difficulty, which has so far led to £2.8bn of additional financing for the programme, including around £2 billion of loans from the government to the Greater London Authority and Transport for London. A compressed schedule, the contractual model, the loss of downward pressure on costs, and the absence of an achievable plan were set against an atmosphere where “can do” became unrealistic.
The programme has been dominated by a fixed completion date of December 2018 set by Crossrail Ltd and the joint sponsors, the Department for Transport (the Department) and TfL. This date drove much of Crossrail Ltd’s decision making. Aiming for December 2018 meant multiple activities ran in parallel.The delivery approach, delays to some contracts and the decision to set and then stick to the December 2018 opening date, increased risks.
Despite this deadline, Crossrail Ltd did not start to produce a sufficiently detailed delivery plan against which to track progress until late 2018. Consequently, Crossrail Ltd had a gap in its understanding of delivery risks and the likelihood of meeting the December 2018 opening date.
By 2015, problems started to emerge on Crossrail and opportunities to change approach were missed. The sponsors had few effective contractual levers to enable them to take action as they had provided Crossrail Ltd with a high degree of autonomy to deliver the programme.
Changes required to the design and to contractors’ delivery schedules has increased costs on most of the 36 main contracts. These changes resulted in increased contract costs of around £2.5 billion between 2013 and 2018, of which £900 million was through the renegotiation of contracts to settle historic contractor claims.
Pressures on the programme continued to escalate through to the end of 2018. Between February 2017 and December 2018, for example, the forecast final cost of the contract to install track and key systems in the tunnels increased by 80% from £532 million to £956 million.
Crossrail Ltd also made decisions that drove unnecessary cost.In early 2018, Crossrail Ltd began carrying out train testing and construction activity in alternating time periods, to allow for early sight of potential train and signalling system issues. However, this testing was of limited use and took any spare time and space from construction workers on site. Crossrail Ltd also reduced the size of its central programme and risk management teams during 2018, in anticipation of the programme reaching completion in December 2018. It is currently attempting to rehire these personnel.