In a report, published today, the National Audit Office states that the way Crossrail has been delivered has driven unnecessary costs and damaged public value.It also analyses how, why and where the project ran into trouble.
Crossrail鈥檚 compressed schedule, the contractual model, the loss of downward pressure on costs, and the absence of an achievable plan were set against an atmosphere where 鈥榗an do鈥� became unrealistic, the National Audit Office (NAO) says.
But until the Elizabeth line opens it is not possible to determine the overall value for money for taxpayers.
In April 2019, Crossrail Ltd announced that it plans to introduce Elizabeth line services on the central section between October 2020 and March 2021. However, Crossrail has not yet completed its assessment of the impact of this opening schedule on costs and it is still unclear when the full Elizabeth line service will start. Crossrail Ltd must now focus on completing its plans and delivering against them, the government鈥檚 financial watchdog says.
In February 2019, the NAO published a memorandum on Crossrail for the House of Commons public accounts committee (PAC), which examined the project鈥檚 overall progress, costs and potential for future delays. PAC concluded that final costs remained uncertain and that there was no date for when the railway would be fully operational.
In today鈥檚 report, called Completing Crossrail, the NAO has further identified how the programme ran into difficulty, which has so far led to 拢2.8bn of additional financing for the programme, including around 拢2bn of loans from the government to the Greater London Authority and Transport for London (TfL).
The programme has been dominated by a fixed completion date of December 2018 set by Crossrail Ltd and the joint sponsors, the Department for Transport (DfT) and TfL. This date drove much of Crossrail Ltd鈥檚 decision making. Aiming for December 2018 meant multiple activities ran in parallel. The delivery approach, delays to some contracts and the decision to set and then stick to the December 2018 opening date, increased risks, the NAO says.
Despite this deadline, Crossrail Ltd did not start to produce a sufficiently detailed delivery plan against which to track progress until late 2018. Consequently, Crossrail had a gap in its understanding of delivery risks and the likelihood of meeting the December 2018 opening date.
By 2015, problems started to emerge and opportunities to change approach were missed. The sponsors had few effective contractual levers to enable them to take action as they had provided Crossrail with a high degree of autonomy to deliver the programme.听
Changes required to the design and to contractors鈥� delivery schedules has increased costs on most of the 36 main contracts. These changes resulted in increased contract costs of around 拢2.5bn between 2013 and 2018.
This 拢2.5bn cost increase was due to a combination of design changes (拢714m), contractors鈥� claims for compensation events (拢936m), schedule of works changes (326m), changes to scope (198m). A further 拢337m of additional cost is attributed to 鈥榦ther鈥� causes, including unexpected site conditions.
Pressures on the programme continued to escalate through to the end of 2018. Between February 2017 and December 2018, for example, the forecast final cost of the contract to install track and key systems in the tunnels increased by 80% from 拢532m to 拢956m. [See table below.]
Crossrail Ltd also made decisions that drove unnecessary cost. In early 2018, it began carrying out train testing and construction activity in alternating time periods, to allow for early sight of potential train and signalling system issues. However, this testing was of limited use and took any spare time and space from construction workers on site. Crossrail also reduced the size of its central programme and risk management teams during 2018, in anticipation of the programme reaching completion in December 2018. It is currently attempting to rehire these personnel.听
Amyas Morse, the head of the NAO, said today: 鈥淭hroughout delivery, and even as pressures mounted, Crossrail Ltd clung to the unrealistic view that it could complete the programme to the original timetable, which has had damaging consequences.
鈥淒fT and TfL must support the new Crossrail Ltd executive team to get the railway built without unrealistic cost or time expectations.
鈥淲hile we cannot make an overall assessment of value for money until Crossrail is complete, there have been a number of choices made in the course of this project that have clearly damaged public value.鈥�
Meg Hillier MP, chair of the public accounts committee, said: 鈥淎s my committee recently reported, the Crossrail programme has been mired by spiralling costs and delays. We have now learnt that services may not run for another two years.
鈥淭he NAO's report provides much needed answers.听 It is concerning that Crossrail Ltd deluded itself for so long about its ability to meet its original opening date, and the 拢17bn-plus programme鈥榮 project management was not up to the job.
鈥淕iven that it is past the point of no return, Crossrail Ltd must now deliver to its revised plan if it is to provide much needed services to passengers and businesses.鈥�
Crossrail cost overruns broken down
| Changes in the forecast cost of selected contracts on the central section to December 2018 | 听 | 听 | 听 | 听 | 听 | 听 |
|---|---|---|---|---|---|---|
| Cost increases have occurred across the programme | 听 | 听 | 听 | 听 | 听 | 听 |
| 听 | 听 | 听 | 听 | 听 | 听 | 听 |
| 听 | Forecast costs | 听 | 听 | 听 | Cost increases | 听 |
| 听 | 听 | 听 | 听 | 听 | 听 | 听 |
| Contract | Target at Award(拢m) | Jan 2015(拢m) | Dec 2018(拢m) | 听 | Award to Jan 2018(拢m) | Award to Jan 2018 (%) |
| 听 | 听 | 听 | 听 | 听 | 听 | 听 |
| Tunnelling, shafts and portals | 听 | 听 | 听 | 听 | 听 | 听 |
| Eastern tunnels 1 | 484 | 754 | 730 | 听 | 246 | 51 |
| Western tunnels 1 | 490 | 737 | 749 | 听 | 259 | 53 |
| Thames tunnel 1 | 196 | 269 | 229 | 听 | 33 | 17 |
| Station Tunnels East 鈥� Early Access Shafts & Sprayed Concrete Lining Works 1 | 246 | 360 | 510 | 听 | 264 | 107 |
| Pudding Mill Lane Portal Civil Works 1 | 52 | 131 | 184 | 听 | 132 | 254 |
| Eleanor Street and Mile End Shafts Civil Works | 46 | 56 | 255 | 听 | 209 | 454 |
| 听 | 听 | 听 | 听 | 听 | 听 | 听 |
|
Station main civils |
听 | 听 | 听 | 听 | 听 | 听 |
| Farringdon Station | 239 | 436 | 634 | 听 | 395 | 165 |
| Liverpool Street Station | 147 | 271 | 374 | 听 | 227 | 154 |
| Paddington Station | 181 | 339 | 571 | 听 | 390 | 215 |
| Bond Street Station | 126 | 182 | 412 | 听 | 286 | 227 |
| Whitechapel Station | 110 | 229 | 659 | 听 | 549 | 499 |
| Tottenham Court Road Station | 98 | 135 | 282 | 听 | 184 | 188 |
| Woolwich Station | 70 | N/A | 234 | 听 | 164 | 234 |
| 听 | 听 | 听 | 听 | 听 | 听 | 听 |
|
Route-wide civil engineering and systems |
听 | 听 | 听 | 听 | 听 | 听 |
| Systemwide (Tunnel track and electrical fit-out) | 323 | 360 | 956 | 听 | 633 | 196 |
| Platform Screen Doors | 27 | N/A | 63 | 听 | 36 | 133 |
| Signalling | 51 | N/A | 131 | 听 | 80 | 157 |
| Communications & Control | 43 | N/A | 139 | 听 | 96 | 223 |
| 听 | 听 | 听 | 听 | 听 | 听 | 听 |
|
Other |
听 | 听 | 听 | 听 | 听 | 听 |
| Ilford Stabling Sidings 1 | 154 | N/A | 153 | 听 | 99 | 183 |
| 听 |
Notes
1. Contracts completed prior to January 2018 and show their final values. The figures for Thames Tunnel and Pudding Mill Lane reflect the costs when they were at 98% and 99% complete respectively 鈥� the final 100% figures were not reported in Crossrail鈥檚 Board reports.
2. Target at award denotes the anticipated cost of the contract at award and does not include adjustments for risk. Other cost values are contractors鈥� forecast of final costs which may include adjustments for cost risks where the contract is not yet complete. 听All values are drawn from Crossrail Ltd board reports.
3. All values are in cash prices.
4. N/A means that the forecast costs of these contracts was not reported in January 2015.
Source: National Audit Office analysis of Crossrail Ltd information
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