Crossrail’s contractors are likely to demand more money if they are rushed towards the new 2019/2020 opening date, auditor EY has warned.
The big four auditor has warned Transport for London (TfL) that such an outcome could increase pressure on the transport body, which is already battling the costs of the Crossrail delay.
Crossrail, also known as the £17.6bn Elizabeth line, was originally scheduled to open last December but is now expected to open between October 2020 and March 2021.
Last month ratings agency Moody’s found that the delay to Crossrail until 2021 will cost TfL £1bn in lost revenue. The £1bn figure is between £300m-£400m more than TfL had forecasted in its 2018 business plan.
“The close down of contracts over 2019/20 and later, is likely to result in further claims from contractors and subcontractors, particularly if deadlines are squeezed to meet the opening date,” EY warned in its end-of-year audit for TfL.
“This does give rise to the risk of additional costs and pressures on funding for TfL as an organisation which will require careful management.”
The Crossrail delay has also squeezed TfL’s ability to deliver other projects, including the Bakerloo line extension, which TfL admitted could only go ahead with central government funding. Similarly, the Northern Line extension to Battersea, which was due to open next year, has now been pushed back to September 2021.
EY acknowledged the potential for project delays, saying there was a “risk of potential impairment of projects as a result of funding constraints”.
Caroline Pidgeon, deputy chair of the London Assembly’s transport committee, told City A.M: “EY has sadly revealed what many of us have long feared – that Crossrail is almost certainly set to face a whole series of legal claims from contractors and subcontractors putting pressure on its expanded budget.
“Sadly the true cost of completing Crossrail is set to continue to increase, creating even further pressures on TfL’s dire financial state and affecting other transport projects.”