MD1570 Croxley Rail Link

1. Introduction and background

1.1 The Croxley Rail Link (CRL) project involves the diversion and extension of the existing Metropolitan line from just north of Croxley to a new terminus at Watford Junction via the existing Watford High Street with two new stations. The existing Metropolitan line terminus at Watford station will close.

1.2 On 26 March 2015 the Mayor directed TfL, under MD1478:

• to take over responsibility for delivering the entire project including civil engineering works, systems and the procurement of additional rolling stock.
• to provide £46.5m of funding towards the costs for delivering Croxley Rail Link based on a total cost of the project of £284.4m on the basis that the Government increased TfL’s overall borrowing requirement by £30m and that £16m would be funded from the TfL capital budget (the remaining costs of £238m were to be funded from HCC and the DfT).
• to be responsible for any cost overruns above the current project estimate of £284.4m

1.3 HCC is leading a consortium of funding partners (including the Hertfordshire Local Enterprise Partnership and Watford Borough Council) who were to contribute £128.08 million to the total costs of the project. The detailed arrangements for payment of this funding were to be agreed separately between TfL and HCC.

2. Objectives and expected outcomes

2.1 The key objectives for the CRL are to provide a catalyst for regeneration and growth in the Watford area and improve connectivity between SW Hertfordshire and NW London.

3. Equality comments

3.1 The new stations will both be fully step-free and include all standard accessibility features. No adverse effects are foreseen on any persons with protected characteristics under the Equality Act 2010.

4. Risks

Reputational

4.1 The proposed change of delivery strategy would increase TfL’s visibility in the eyes of the public and media, making TfL more exposed in the event of future cost increases or programme delays.
Cost

4.2 The proposed funding strategy would mean TfL potentially needing to contribute more than £16m should the overall cost be higher than the funding package of £284.4m. The current P50 estimate for the project is £299m. Outturn at this level would require additional TfL funding of £15m. The cost escalation has arisen primarily due to the level of sunk cost incurred by HCC being higher than had been anticipated at the time of the 26 March 2015 MD.

5. Financial comments

5.1 MD1478 noted, at paragraph 5.4, that the following breakdown of funding had been agreed for the scheme:

5.2 The local consortium funding contribution breakdown is as follows:

5.3 HCC’s funding contribution breakdown, which has been approved by its Cabinet, is as follows:

5.4 HCC’s portion of the £128.08m local consortium funding contribution includes two parcels of land to which HCC have attributed a total value of £2.73m. The first parcel, comprising land between Ascot Road and Wiggenhall Road (to which a value of £1.8m has been attributed) will be transferred by Network Rail to LUL for a nominal consideration of £1. This land is assumed to have limited commercial value. The second parcel of land at Ascot Road will be used by LUL as a work site during construction. Roughly 25% of it will be transferred to LUL although title to the remainder will be retained by HCC and used as a station car park which HCC will operate for its own account. Again, the commercial value is likely to be limited.

The cash element of the local consortium funding will be reduced by £2.73m to £125.35m.

5.5 Accepting HCC’s land contribution on the basis of its £2.73m valuation, as set out above, will reduce by the same amount the cash element of the £128.08m local consortium funding contribution that would be paid to TfL.

5.6 The overall funding envelope remains £284.4m and if the project is delivered, in full, for a total cost below the approved budget cost of £284.4m, TfL will retain the full amount of the resulting cost savings. TfL will still meet any eligible project costs incurred over £284.4m.

5.7 There remain no financial implications for the GLA.

6. Legal comments

6.1 The proposed further direction raises no legal issues not considered in MD 1478.

8.1 TfL’s latest programme is in the table below:

Direction to Transport for London (supplemental to Direction of 26 March 2015)