Crossrail trains look set to be financed under PFI, after transport secretary Justine Greening denied Boris Johnson’s request to buy the rolling stock through TfL.
The Mayor wanted TfL to borrow the £1bn necessary to buy the trains, since it can get better interest rates than private companies (this is where all that AAA credit-rating gubbins comes in; TfL shares the government top-rank status). But TfL has already taken out £6.4bn in loans and isn’t allowed to add more than £1.9bn over the next four years; the Crossrail deal would have pushed it over its debt ceiling. With a government hellbent on driving down public debt, not even Boris’s fondness for borrowing was going to persuade them.
This decision is a bit of a shitter for UK manufacturing because the bidding process is now a mirror of the Thameslink deal, making it likely that Siemens will end up the main contractor rather than, say, Derby-based Bombardier. It’s also possible the deal could work out more expensive in the long run, as TfL — who will run Crossrail when it’s finished — has to lease the trains back from the PFI group. And we know PFI has always worked out really well for TfL in the past. Er.