London's pounds 2.6 billion rail artery faces axe

CHRISTIAN WOLMAR

Transport Correspondent

Plans to build a new railway line under London linking Paddington and Liverpool Street stations have been shelved by the Government after pounds 150m had been spent on drawing up the scheme.

The pounds 2.6bn Crossrail scheme which would have provided a range of new railway services linking areas to the east and west of London will not be started for at least the next seven years when the Channel tunnel rail link is completed. But a statement in the Commons yesterday by Sir George Young, Secretary of State for Transport, indicated it could well be abandoned for good later this year.

London Transport, British Rail and Railtrack had hoped to start the parliamentary process to enable the construction of the line later this year, but Sir George has ordered the three organisations not to proceed with plans "for the time being". He now wants Railtrack to take control of the project after it has been privatised but warned that "Crossrail should proceed only as a joint venture with a substantial private sector contribution".

It is doubtful that Railtrack, which is due to be sold to the public next month, will want to take on such an expensive scheme which will need a large subsidy from the Government. Indeed, a report by Nick Montagu, the Department of Transport official in charge of rail privatisation, warned in a memo leaked late last year that handing over the Crossrail project to Railtrack would jeopardise the privatisation because it was too onerous. Therefore, the transfer is being seen as sounding the death knell for the scheme.

Michael Cassidy, chairman of the policy and resources committee of the City of London Corporation, which has been one of the main supporters of the scheme, said: "While I'm pleased the Government has not killed it off straight away, I'm convinced that once the Treasury looks at it again in the autumn once Railtrack has been privatised, it will scrap it permanently."

Mr Cassidy sees the scheme as vital to the City's future, stating: "We expect to regain employment levels of the late 1980s when there were 320,000 working in the City compared with 280,000 now. At the time, the Central Line was at times dangerously overcrowded and this will happen again unless Crossrail is built." Crossrail would run parallel to the Central Line for the route through London, relieving pressure on one of London's busiest Tube lines.

London Transport chiefs are known to be privately furious at the Government's decision as they see it as a vital part of London's infrastructure. However, publicly, Peter Ford, LT's chairman, merely reiterated his support for the scheme. An earlier attempt to get Crossrail through Parliament collapsed two years ago after opposition from a Tory MP on the committee considering the Bill.

Clare Short, Labour's transport spokeswoman, was angered by the decision and said: "Crossrail is a fantastically valued project which has been sabotaged by the Government to get Railtrack privatised."