The British government, chaired by Boris Johnson, has had no choice but to come to the rescue of the London transport network. And all because Transport for London (TfL) was in an economic situation of technical bankruptcy, even before the pandemic, and that the current crisis has only accentuated. The question that arises is how it affects Ferrovial because the Spanish company has several agreements with TfL.
Specific, Ferrovial has three agreements with Transport for London: Silvertown, Northern Line and Crossrail. Regarding these last two, it can be said that there will be no impact, since the works are about to be delivered. As for Silvertown, it is still in the design phase. Then it will be about five years old. The concession is a 30-year availability payment.
The British Government has decided allocate 1.8 billion pounds sterling (about 2 billion euros) to the rescue of TfL. In this way, what is intended is that both the subway and the buses run smoothly until March 2021.
The one made by the British Conservative Prime Minister has not been an easy decision. In fact, has been met with discrepancies by the Labor Mayor of London, Sadiq Khan. Since March, TfL’s ticketing income has fallen brutally due to the measures taken to curb the pandemic.
To give continuity to TfL, the mayor of london has proposed to increase city fees. The Executive, for its part, has committed to developing a plan before 2023 to safeguard its financial viability. In both cases, good news for Ferrovial. Nor should we forget that in May next year there will be elections for the mayor of London. And TfL is sure to be an electoral weapon for Conservatives and Labor.
THE WORKS OF FERROVIAL
There are three works that Ferrovial currently has open in London. Those nearing completion are Northern Line and Crossrail. Northern Line was awarded to Ferrovial in 2014 andA consortium with British construction company Laing O’Rourke in equal parts.
The Northern Line project included the excavation of a new six kilometer tunnel and two stations. Its value is 500 million pounds (about 628 million euros) and will be completed in early 2021.
With regard to Crossrail, it dates back to 2010, when Ferrovial was awarded the work together with the British BAM Nutall and Kier Construction. The goal was to undertake new tunnels that will increase London’s railway capacity by 10%. The opening date is scheduled for 2021 and, from then on, the city will be able to cross from east to west (and vice versa) at a speed of 140 kilometers per hour. The value of the contracts is 800 million pounds (about 90 million euros).
Silvertown, meanwhile, will have to wait until 2025 to be inaugurated. This is the largest investment in roads in East London in the last three decades. Ferrovial, through its subsidiary Cintra, is part of the RiverLinx consortium also made up of Aberdeen Standard, BAM PPP, PGGM, Macquarie Capital and SK E&C. Its value? 1,000 million pounds (about 1,135 million euros). ACS challenged the concession but it was ultimately rejected.