Case Studies of Value Uplift
London Cross Rail
Authority: Greater London Authority
Area: London, East West through the City
Project: 100km rail project, 42km of tunnels, 40 stations
Mode: High Frequency/Capacity Rail
Cost: 14.8 Billion GBP (2009)
Value Capture: Business Sales Tax and property development
Crossrail is Europe’s largest construction project, it started in 2009 and is expected to be completed in 2017. The route is a dual track 100km line, 42km of which tunnelling is being completed for. The will be 40 Crossrail stations, including 10 new stations that are being constructed as part of the project. The route goes from Reading and Heathrow in the West and through to Shenfield and Abbey in the East. On route it passes through London’s key business, employment, and entertainment districts, including Heathrow, West End, the city, and Docklands. Once complete, it enables an additional 1.5 million residents to be within 45 minutes travel time of central London, as well providing significant service improvements to an additional 750,000 exiting service users. It is expected annual travel on the Crossrail to exceed 200 Million passenger Journeys 1.
Impacts of development
Given the size of the project, coupled with the additional 10% capacity increase on the public transport network, it is expected to generate significate economic gains. Early estimation has suggested it is in the regions of nearly £50Billion, generated through, travel time savings, increased economic activity, gains in land values, and decreased greenhouse gas emissions, innovation in rail sector development, and greater access to marketplaces both domestically and internationally 2. The project also employs 8,700 people. The expanded capacity in the network is also enabling substantial increases in the housing stock nearby 3.
Value Capture Mechanism
The Greater London authority is seeking to capture part of the economic gains realised to help fund development. Likewise the project also seeks to benefit from the large increases in property value caused by Crossrail. It has twelve major developments along the route with an expected income of £500 million 4. Businesses in the London area have also had a number of levy and tax mechanisms introduced and this will result in the direct business contribution to the project totalling more than £4.1 Billion. Additionally, a few large institutional organisations and businesses will direct contribute almost £1 Billion for investments in station and network infrastructure. The total funding raised through direct value capture totalling more than £5.6 Billion 5. Significant attention will be paid to the success of Cross Rail.
- Crossrail in numbers. (2015, September 1). Retrieved November 14, 2015.
- Colin and Partners Ltd. (2007). The Economic benefits of Crossrail. London, UK: Crossrail Ltd.
- City of London Corporation. (2015). The Impacts of Crossrail: Secondary research briefing paper. London, United Kingdom: City of London Corporation
- Crossrail Limited. (2015). Places & Spaces: Property Development on the Crossrail route. London, UK: Crossrail Ltd.
- Greater London Authority. (2009). The Crossrail Business Rate Supplement: Summary of initial prospectus. London, United Kingdom: Greater London Authority.