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Crossrail given extra £350m loan as costs soar

Crossrail has been handed an extra £350m by the government to support construction and testing work on the delayed £15.4bn line.

Rail minister Jo Johnson confirmed the government would be providing a £350m loan to Crossrail to finance the final fit-out of the tunnels, work on stations and systems testing.

Transport for London said the money would be used for work until a full financing agreement between the mayor and Department for Transport was agreed.

The full financing agreement could see further funds injected to the project on top of its current £15.4bn funding package.

The £350m loan will be given on top of the £590m funding handed to the project in July, which comprised £300m being handed to Crossrail and £290m to Network Rail to complete associated works.

This was followed in August by the news that the Elizabeth line would not open until autumn 2019, at least nine months later than the December 2018 opening date.

Mr Johnson said: “Discussions between TfL and government are under way as to how any additional funding will be provided, with London – as the primary beneficiary of Crossrail – bearing any additional costs via a financing arrangement.

“TfL and the Department for Transport have commissioned an independent review of Crossrail’s governance and a separate review on Crossrail’s finance and commercial position.

“Today, as an interim measure, we are announcing that £350m of short-term repayable financing will be made available to the mayor for the year 2018/19. This will ensure that full momentum is maintained behind Crossrail.”

More: What’s behind the delays?

CN investigates the detailed reasons behind the scheme’s nine-month setback – and whether more delays could follow.

KPMG is currently carrying out a review of Crossrail’s funding and financing position which will inform the financing agreement.

CN reported last month that testing on the scheme was well behind schedule, with one source saying that only 50 per cent of it had been completed.

Construction work on Bond Street was also reported to be behind schedule and would not open until at least the start of 2019.

TfL commissioner Mike Brown said: “The confirmation of an interim financing package between the government and the mayor of London will enable Crossrail Ltd to continue its construction work and vital testing at pace to open the Elizabeth line to passengers as quickly as possible.

“The funding will go towards Crossrail Ltd completing the final fit-out of the tunnels, work on stations and the extensive safety and reliability testing needed for the new systems.

“We have commissioned independent reviews into Crossrail Ltd’s governance and financing to ensure its projections are robust.

“These reviews are being carried out by KPMG and once this work is finalised a full financing agreement will be developed by the government and mayor of London.”

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