Over £3bn could be raised from developers to pay for a second Crossrail line, according to business lobby group London First.
A report by London First said £990m of borrowing could be raised for Crossrail 2 using section 106 and community infrastructure levy contributions made by developers
The paper, by the group’s taskforce on Crossrail 2, suggested that a further £2.4bn could be raised through large scale housing development at each end of the route plus higher density building around stations.
The report said an extra £870m of debt could be supported by increasing council tax in London and another £1.81bn from a 30-year long rise in business rates.
It said London tube and rail fares should be increased by 5 per cent phased over several years to support £3.12bn of borrowing. It also said Network Rail should contribute an extra £2bn and the Treasury should put in £4bn.
However these measures would raise a total of £18.19bn – not enough meet the cost of the project plus the Treasury’s 66 per cent contingency, which totals nearly £20bn in 2012 prices.
The report said giving London property tax raising powers and the ability to borrow against them would raise an extra £5.21bn to give a total of £23.4bn. London’s grant from central government would be correspondingly lowered, the report said.
London First’s estimate of Crossrail 2 costs without the government contingency is £12bn at 2012 prices. The report also used £16bn as an estimate because it is the mid-point between the £12bn and £20bn figures.
London First proposed Crossrail 2 in February 2013 although variations on the route had been suggested before. Crossrail 2 would run from to go towards to go towards the Crossrail 2 line from Cheshunt in Hertfordshire, though London to Surbiton and Epsom in Surrey and Twickenham in Middlesex.
Chair of London First’s taskforce, Francis Salway, former chief executive of developer Land Securities, said: “Failure to invest would make life intolerable for Londoners, hamper London’s economic growth and hit government tax receipts.
“We may be half way through Crossrail 1, but its success - and the pressing need for extra capacity in London - means now is the time to be pushing forward with plans for Crossrail 2.”