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Who will foot the Battersea tube bill?

A brand new, £1bn infrastructure project designed to connect a part of south-west London to the capital’s major transport system could be rendered impotent because the body that built it refused to open one of its key stations.

It may seem improbable, but this is one potential scenario that Transport for London failed to rule out at during a meeting with the London Assembly this morning.

At the heart of the tussle, as CN reported today, is the question over who should pay for an additional £240m in additional costs, which have been added to the Northern Line Extension.

TfL is stating that the extra costs are down to design changes implemented by the developer.

In essence, TfL wants Battersea Power Station Development Corporation (BPSDC) to foot the bill for these extra costs, not the taxpayer.

Asked if, in theory, it could withhold the opening of the new station, TfL’s major projects director Stuart Harvey said keeping the station closed was “an option”. 

TfL refused to say whether this option was being seriously considered. However, does the very mention of a possible mothballing of a new station seem credible?

There is some recent history that shows, yes, it could just well be an option.

In 2013, the Department for Transport (DfT), TfL, Greenwich Council and developer Berkeley were engaged in a similar spat over the costs of the fit-out of the £100m Woolwich Crossrail station.

During that furore, which begun in 2009 and lasted for four years, the DfT threatened to instruct Crossrail to draw up plans “for a service that runs through the station” without stopping. The DfT insisted that the Crossrail station would only open if the project recieved “sufficient funding contributions from developers and businesses in the area”.

The case, which ended up with parliament getting involved, was finally solved when Crossrail recieved an extra £54m of funding.

Interestingly it wasn’t only Berkeley that pledged to put in extra cash. The £54m was made up of contributions from the local council, TfL, the Greater London Authority as well as private contributions.

So who could foot the bill for the Battersea station?

BPSDC argued in June that it had to cut its affordable housing provision by 40 per cent due to the project being in danger of becoming “financially unviable”.

Wandsworth Council agreed to a change of provision that meant 250 affordable homes (out of a total provision of 636) would only be built after an end-of-scheme review – whereby BPS assessed the profit it expected to make on the scheme before deciding whether it could afford the homes.

The restoration issues on phase two of the project, which saw Mace replace Skanska last month, is one area where the bill has already soared from the original estimate of £600m to £1.15bn. Another £240m added to this bill will stretch the finances further.

It begs the question: who will ultimately pay for the costly station changes?

Will it be BPSDC or those looking to join the housing ladder?

Readers' comments (1)

  • Why oh why do developers continue to massively underestimate the real cost of building infrastructure. Is there any wonder why the only people that make profit from construction are lawyers !

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