But funding is not yet in place, and ministers could not be drawn out on how much the government was prepared to contribute. Privately, analysts believe this is part of a negotiating strategy on the part of ministers to see how much the construction and property industries as well as the city's financial houses would be prepared to stump up. The announcement did make clear, though, the most of the funding for the €15-billion ($18.6-billion) CrossRail project will have to come from the private sector, possibly through fares, development levies and property taxes.
"The case for a CrossRail link across London is clear and will get stronger as London continues to grow," says Transport secretary Alastair Darling. "But the plans need to be robust and value for money. The report makes clear CrossRail is needed, but it represents a huge challenge both to deliver and fund. We intend to introduce a hybrid bill at the earliest opportunity to take the powers necessary for CrossRail to be built. "At the same time," Darling continues, "as the Montague report recognises, a major funding challenge remains. Government will need to work with the mayor and the London business community to find a funding solution where everyone pays their fair share. This will include consulting on appropriate alternative funding mechanisms."
Among the alternatives for financing the schemes is a land levy paid by developers and based on the increasing value of land near the route. That idea is gaining momentum in some circles, including within London First, the lobby group for businesses in the capital, which has pointed to a fourfold increase in property values along the Jubilee Line Extension. It could raise an estimated €600 billion ($742.2 billion) from developers who stand to gain the most from an uplift in property values.
Another option, put forward by London Mayor Ken Livingstone, is for 3% increase in business rates, which would bring in €3.5 billion ($4.3 billion) as well. There is also the possibility of tailoring the legislation to allow the city to raise some of the funding through a bond issue secured against future fares.
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