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London Businesses Say Crossrail Funding Plan May Be Difficult

Bloomberg: Sept. 21
By Brian Lysaght

A group representing 300 London businesses said it may be "tough'' to reach an agreement with the U.K. government over how to the £15 billion Crossrail.

Business leaders from the U.K. capital met yesterday with Ruth Kelly, the U.K. transport secretary, and were told that the government wants businesses to find a solution for funding the project by Sept. 25, according to business group London First.

"We are ready to help find a fair way for businesses to contribute to meeting this funding gap, but it will be a tough call to achieve all this in the timeframes being discussed,'' said Jo Valentine, chief executive of the group, in an e-mailed statement.

The railway, first proposed in the 1980s, would connect Heathrow Airport in the west with central London and the Canary Wharf financial district in the east. Supporters say it would ease overcrowding on the 144-year-old London Underground. The meeting yesterday included representatives from Citigroup, Deutsche Bank AG and British Land Co. Plc.

Supporters of the railway have proposed dividing the costs equally between the U.K. government, farepayers and London businesses, which would pay a special tax supplement of as much as 3 percent on business property taxes.

"The support of businesses is still there and I'm confident a solution will be worked out,'' said Michael Snyder, who attended the Kelly meeting as policy chairman at the City of London business district, in an interview today. "The government has got to do it in an organized way.''

A spokesman for the Department of Transport said today that Crossrail may be part of next month's government spending review, which sets out funding priorities.

London Mayor Ken Livingstone told the city's legislative assembly on Sept. 12 that the government would be "very generous'' about funding the railroad.

A bill authorizing the construction of Crossrail is being considered in Parliament and could become law by early 2008.