Shani Wallis, TunnelTalk

A substantial source of funding was secured this week to help build the Crossrail project in London. On Wednesday (8 September 2009) stakeholder Transport for London (TfL), confirmed a £1 billion loan from the European Investment Bank (EIB) to finance part of their contribution to the near £16 billion capital cost investment. TfL and the Greater London Authority are responsible for contributing £7.7 billion of Crossrail's £15.9 billion funding. Of that, £2.4 billion will be funded from TfL borrowings linked to future Crossrail fares revenue.

The EIB is the long-term financing institution owned by the 27 European Union Member States for providing loans for projects that help EU economic objectives including support for construction and upgrading of transport infrastructure in urban areas and for improving international links. The £1bn loan facility with the EIB is a contractual agreement with TfL and TfL will subsequently provide funding to Crossrail Ltd as per the Crossrail funding agreement with the facility being drawn down over the next six years.

The core underground section of the new rail project in London

Terry Morgan, Chairman of Crossrail Ltd, said: "This £1 billion loan from the EIB is a massive confidence boost for Crossrail. The loan will underpin TfL and London's commitment to the project."

Mayor of London, Boris Johnson, said: "Our good friends at the EIB have provided us with a billion more reasons to proceed with the unstoppable force that is Crossrail. It is one of the largest loans ever secured for a transport project and I am especially pleased to have this backing."

Simon Brooks, Vice-President, European Investment Bank said: "Crossrail is the largest construction project in Europe and will also link London more efficiently into the European and global transport networks. We at the EIB are delighted to support the project with this loan."

In further positive news for the project this week, Network Rail, a principal project sub-partner which is managing all the new surface rail and integration works and will eventually own the tunnels and stations on the new central underground section, had its plans approved by Islington Council to link Thameslink, Crossrail and London Underground services at a new integrated ticket hall at Farringdon Station.

Network Rail's Programme Manager Richard Walker commented: "Bringing together Thameslink services, Crossrail and connections to the Tube is common sense."

John Ball, Director of Strategy and Service Development, London Underground said: "By 2017, Farringdon will have been transformed into one of the most important transport hubs in central London providing passengers given the benefit of connecting between north-south and east-west journeys across London." An ongoing £5.5 billion investment programme in Thameslink will also provide it with new trains and improve the railway infrastructure for that vital north-south service.

At the same time, leading tunnel companies in the UK and Europe are negotiating joint ventures and partnerships in time to meet the 28 September, 2009 deadline for registering interest in bidding for the project's first two huge tunnelling contracts under the heart of the capital. Costain, Skanska and Bilfinger Berger are reported as in discussions; BAM (formerly Edmund Nuttall) Kier and Ferrovial of Spain are considering a joint venture, with perhaps sister BAM company Wayss & Freytag called on for further tunnelling expertise; and J Murphy and Hochtief are also being grouped together. The Balfour Beatty, Morgan Est, Vinci, Beton und Monierbau JV declared its combination when the calls for interest in bidding the two big contracts to complete the twin running tunnels under London from Paddington in the west to Liverpool Street and beyond in the east were invited two weeks ago at the end of August. Specialist subcontractors lining up to add their expertise to the main contract efforts include Bachy Soletanche, Balfour Beatty Ground Engineering, and Morgan Est Piling, with others as far a field as China making trips to London to meet with the main contenders.

For small to medium sized companies interested in filling the hundreds of smaller supply contracts on the project, an event on Thursday September 10 organized by the London Chamber of Commerce provided an opportunity for companies with 20-250 employees to learn about Crossrail's procurement and purchasing policies and question top Crossrail representatives including Chief Executive Rob Holden, Head of Stakeholder Management Simon Bennett, and Steve Rowsell, the project's Head of Procurement.

As a government-owned entity, Crossrail has responsibility to obtain value for money when acquiring the project's works, supplies and services, and apply ethical behaviour in the management and expenditure of public funds. According to May 2006, Transport for London estimates, the benefit of Crossrail to the UK economy will be at least £36 billion. With construction work already started on the project's station at Canary Wharf and more than half of the detailed design contracts awarded and progressing, the two main tunnelling contracts, packaged east and west of Farringdon Station are scheduled to be awarded by mid-2010 and the first TBMs into their drives by late 2011.

References

Crossrail launches construction phase - TunnelTalk, Aug 2009
Crossrail planning and mobilization to date - TunnelTalk, July 09, June 09, May 09
Crossrail website