Plans to extend the Metropolitan line have been put in doubt after Transport for London revealed a £50m black hole in funding for the project.
A letter seen by Construction News revealed that an extra £50m would be needed to complete the project, which will see the line extended to Watford Junction and Watford High Street stations.
The letter from TfL’s head of London rail investment and LU line extensions Robert Niven to Conservative London Assembly member Gareth Bacon said TfL now estimated the project would cost £334m – and could not be delivered without the extra cash.
The Department for Transport has ruled out supplying any extra funding and said it expected the scheme to be delivered for £284m as agreed between TfL and the government in 2015.
Construction News reported in January that TfL was looking into cost-cutting measures in the delivery of the scheme amid fears of a spiralling budget.
Under a funding agreement for the project set out in November 2015, TfL agreed to give £49m to support delivery, while local funding partners agreed to provide £125m and the DfT £109.8m.
Mr Niven confirmed that this would no longer be enough to cover the full scope of works and alternative funding streams would need to be found to ensure its completion.
He wrote: “We simply do not have the funding to be able to absorb these additional costs.
“We have published a business plan that responds to the financial constraints imposed by the government’s decision to remove our operating grant, and our focus now has to be on delivering that plan.”
He added that mayor of London Sadiq Khan had written to transport secretary Chris Grayling regarding further discussions on how to take the project forward.
When plans for the project, known as the Croxley Rail Link, were first approved in 2011, it was expected to be delivered under the management of Hertfordshire County Council at a cost of £116.8m.
In November 2015, TfL took over the scheme after costs rose to £280m and the funding deal was agreed between the DfT, TfL and the council.
In December 2016, transport minister Andrew Jones ruled out the DfT providing any extra funding for the project and said it expected TfL to meet any expense above the £284.4m figure.
Taylor Woodrow beat Carillion and Bam Nuttall in 2013 to the contract to design and carry out enabling works for the project, with the contractor expected to clinch the main works deal.
But Construction News reported in January that no contractor had been appointed to the main works and TfL was looking into an alternative procurement plan amid the cost concerns.
Mr Niven said that TfL would continue to deliver stage one design work, which it expects to complete in July, and said stage two works could begin should a revised funding package be agreed.
TfL London Underground director of strategy David Hughes said: “Following this extensive work, we estimate that, to complete the extension, which is located outside of London, we would need to double the funding commitment we have already made, requiring more than an additional £50m that we are unable to provide.
“This does not mean the project has been cancelled and we remain open to helping assist the DfT in finding an alternative funding package for the project, or alternative schemes that may be more affordable.”
A DfT spokesman said: “Croxley Rail Link will deliver significant transport benefits and significantly boost economic growth in Watford and the wider north-west London area.
“We wrote to the mayor in January saying that we expect TfL to take forward the scheme in line with the agreements put in place in 2015. This remains our position.”
A spokesperson for the mayor of London said: “This project is outside London and therefore responsibility for delivering it ultimately lies with the government.
“The previous mayor committed £49m of London taxpayers’ money to delivering it without properly working out how much it would cost. Since then, estimated costs have spiralled by an additional £50m.
“TfL is happy to discuss with the government how this funding gap can be filled, but, as this scheme is outside London, it is not right that London taxpayers should have to pay even more towards it.”
Mr Bacon said: “The Metropolitan line extension’s future has been put in jeopardy due to the mayor’s poor decision-making.
“His partial fares freeze has put TfL’s budget in total turmoil, and left him with no room to move if new expenses crop up.
“The mayor will not be able to find this funding and instead wants the government to accept the burden of saving this project.”