Flashing the Cash: Kensington & Chelsea’s Crossrail Gamble

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Kensington & Chelsea have announced that they would be prepared to underwrite the cost of constructing a Crossrail station in the Kensal area.

The Borough have confirmed that they would be prepared to underwrite any station constructed (currently priced at about £33m), with the intention being to claw as much of that money as is possible back through S106 contributions from developers on the Gasworks site.

Kensington & Chelsea have been pushing for a Crossrail station at the site for some time, seeing such a station as a huge boost to the regeneration of the area. It would be a turnback station located west of Paddington with access onto Canal Way and thus would be served by a proportion of the Crossrail services currently set to run no further west than Paddington.

It is probably fair to say that Crossrail’s sponsors have yet to be convinced of the validity of a station at Kensal – mainly due to the potential impact it would have on service frequencies and timings. Under pressure from the Council back in December 2009, the Mayor conceded that he would not object to such a station going ahead, however, if Kensington & Chelsea could demonstrate that it would meet the following “tests”:

1) it must not delay the Crossrail construction programme
2) it must not add costs to the Crossrail project
3) it should not degrade the performance of Crossrail or other rail services.

Since then Kensington & Chelsea have been working hard to make the numbers fit. Back in August 2010 they agreed to fund the first part of a Network Rail/MVA Consultancy rail performance modeling report and have been working with Crossrail on what was possible and what wasn’t in design terms.

Crossrail have now informed the council that they plan to make a final decision on a Kensal station in May of this year, thus effectively setting a firm deadline for the first of the above tests to be met. This underwriting announcement, therefore, is obviously intended by the Council to meet the second.

Interestingly, looking at the Council’s own report in more detail, there is another reason for the underwriting that isn’t mentioned in the Council’s Press Release. The business case for the station, put together by RfL (TfL’s “overground” arm who are responsible for Crossrail’s business cases), is currently not particularly stellar – it has a Benefit Cost Ratio (BCR) of 1.1 which is well below Crossrail’s overall ratio of 1.81.

This is no surprise – the business case leans heavily on how many passengers would use such a station and an earlier 2008 feasability study had already established that an additional 7,200 passenger journeys each weekday would be needed simply to offset the construction cost. The council are hoping, therefore, that by indicating that they would effectively shoulder the cost of construction, RfL can be persuaded to remove the station’s capital costs from the business case. This would make the BCR significantly better. Alongside this, they also believe (likely correctly) that the current business under-emphasises the impact that the canal, existing railway and cemetery have on public transport in the area. Effectively the Council believes that usage of the station would be higher than RfL currently estimate, as for many people the Tube is not as easy to get to as simple modelling would suggest. The Borough know that Crossrail’s Sponsors will place a lot of weight on the results of the Business Case when it comes to making a decision on whether to go ahead with the station and thus they obviously want to try and get it as squeaky clean and positive as they can.

Of course even if this announcement helps the Borough meet test 1) and 2), the elephant in the room remains test 3).

The absence of any mention of this test from the press release probably indicates best that the situation here isn’t as clear-cut in the station’s favour as the Council would like. The Network Rail/MVA stage 1 report mentioned above has indeed been completed, and it largely seems to confirm what Crossrail have said all along – that a station at Kensal would have a negative impact on Crossrail’s perfomance.

Part of the problem relates to Crossrail’s cost reduction plans. Crossrail are currently planning to run the absolute minimum amount of trains necessary to meet the train frequencies and reliability they have committed to. As part of this, they have currently determined that they can likely remove one train (and possibly more) from their working timetables.

This obviously makes the margin for changes incredibly small and the stage 1 report showed whilst a Kensal Crossrail station would have little impact on a non-reduced timetable, on a “perfect day” running using Crossrail’s newly reduced service pattern, a Kensal Station would have a detrimental impact.

The problem is, however, that a new timetable optimised around reduced train numbers has yet to be officially designed by Crossrail itself, meaning MCA’s modelling was arguably of dubious value anyway.

On top of this, the modelling did actually throw up a rather interesting fact – that Kensal Station would actually have a net positive impact on the line under the “optimised” scenario when services were disrupted, because it increased the flexibility of the line when it needed to tweak and restore service patterns.

Arguing that your new station is a good idea because you expect the line to perform badly may initially not seem like a good way to win people over to your cause, but its a perfectly valid stance for Kensington & Chelsea to take and one that they seem keen to do.

Overall, therefore, it seems increasingly likely that there will be no clear answer to the crucial third test – Kensington & Chelsea can’t really demonstrate that the station will have an overall neutral or positive impact on the new line, but neither can Crossrail conclusively demonstrate that it will have a negative one.

In that light, and given this financial underwriting announcement, it seems that Kensington & Chelsea are therefore gambling on throwing enough positives into other areas – the finances and a healthier business case from RfL – to make the powers-that-be decide that looking too closely into the murky greys of the timetable impact isn’t worth the effort.

Whether that strategy will pay off, remains to be seen.

Written by John Bull
John Bull is the Editor of London Reconnections. A transport journalist and historian, his writing often focuses on the political or strategic challenges facing London's transport network and beyond.