UK - Tube lines, Crossrail and the recession

[John Ashworth]

Tube Lines boss named next chairman of Crossrail with role of leading industry out of recession
Dan Milmo
The Guardian, Friday November 14 2008

The chief executive of Tube Lines, the London underground engineering contractor, has been handed the responsibility of kick-starting the UK construction sector as chairman of Crossrail, the £16bn trans-London rail project.

Terry Morgan will become non-executive chairman of the biggest transport infrastructure scheme in the UK since the Channel tunnel rail link when he steps down from Tube Lines in November next year. He has been asked to serve his 12-month notice period while Tube Lines completes funding negotiations with the government and Transport for London, the mayor's transport authority. The current executive chairman of Crossrail, Douglas Oakervee, will oversee the project in the meantime with construction work due to begin next year.

Morgan said that Crossrail would not compete for funds with Tube Lines, whose work programme is facing a deficit of at least £1.4bn. TfL is arguing that its £40bn funding settlement from the Department for Transport is not enough to plug the funding gap and to cover London's £7.7bn contribution to Crossrail.

The Tube Lines boss urged the government to bail out the tube but said Crossrail would go ahead regardless.

"They are not competing for funding. The underground needs the investment but the projects are complementary. Crossrail will deliver all its potential if there is a robust underground service delivering passengers to all the interchanges," he said.

Crossrail will run from Maidenhead in Berkshire to Shenfield in Essex, taking in Heathrow airport, the city centre and Canary Wharf on the way. It is co-sponsored by TfL and the Department for Transport and, according to rail professionals who have been seconded to work on construction plans, is a highly complicated engineering project.

Morgan will work up to three days a week and be involved in choosing Crossrail's chief executive. The 59-year-old said he wanted Tube Lines to be his last executive role, adding: "Some of the experiences I have had with Tube Lines will help [at Crossrail], like funding, moving a company from the planning stage to beginning work, and talking to stakeholders. I think I will be able to help the new chief executive understand those challenges."

Tim O'Toole, head of London Underground, has argued that TfL should raise debt on behalf of Tube Lines, raising the possibility of the London mayor exercising greater control over the company. Tube Lines is the only remaining contractor in the £30bn public-private partnership for upgrading the tube. The main contractor, Metronet, entered administration last year. Asked if TfL was suggesting it become a stakeholder in Tube Lines, O'Toole said: "That would be more efficient." Because it is publicly owned, TfL can raise debt at a cheaper rate than Tube Lines.