US duo may put CrossRail on track

CROSSRAIL, the much deferred plan for a rail tunnel through the heart of London, was back on track today following plans for a £20bn rescue of the ailing national rail system by two US groups. The new tunnel would connect existing rail links to the west at Paddington station and to the east at Liverpool Street. It would call at enlarged stations through central London.

Although in much demand by the City to provide a direct link with Heathrow, the Government and the private sector have baulked at the huge cost - somewhere between £3.5bn and £5bn.

Now there is fresh hope for both CrossRail and the proposed 200mph plus new line linking London with the North and Scotland, which would cost a further £5bn.

Under initial plans now being discussed with the Government, two US giants, Babcock & Brown and Morgan Stanley, would plough money into the existing 10-year plan to improve the railway. Engineering giant Babcock & Brown and Morgan Stanley, the major investment bank, are an ideal combination for the proposal.

The £63bn plan - the private sector providing half, the remainder coming from the taxpayer - is in doubt, with business confidence shaken by the forced adminstration of Railtrack. The plan will be seized upon by Stephen Byers, the embattled Transport Secretary, as a positive way of drastically improving the network. Although the proposals would first of all concentrate on enhancements to the system, such as the upgrade to the West Coast Main Line, it would then extend to those projects, such as CrossRail, outside the existing 10-year plan on the grounds of affordability.

Richard Bowker, chairmain of the governing Strategic Rail Authority (SRA) believes there is a 'genuine possibility' that CrossRail - mooted for more than a decade - will be built.

The US boost came as a new survey from business leaders revealed that late running and cancelled trains cost the average UK firm more than £21,000 in lost staff time. That, says the British Chamber of Commerce, is the equivalent to each firm losing 256 hours a year - or a member of staff being away for nearly two months.

The BCC poll found that: 67% have lost staff time; 81% say rail travel has worsened under Labour; 77% believe the system does not adequately serve the needs of their business.