Crossrail risk on track for Lloyd’s
11 August 2008
The London Crossrail project is one of the largest and most challenging construction schemes in Europe and the risks which are associated with it are as varied as the route the track will take. And at a cost of £15.9bn, it is quite simply the most ambitious addition to the British railways network in decades.
Lloyd’s broker Heath Lambert has been awarded a ten year contract to develop and place the insurance programme for the scheme.
The Parliamentary Bill for the project is expected to receive Royal Assent in the coming months and Crossrail will run from Maidenhead and Heathrow in the west to Shenfield and Abbey Wood in the east. In all it will require 22 km of new twin-bore tunnels to be constructed under Central London, with nine new stations at Paddington, Bond Street, Tottenham Court Road, Farringdon, Liverpool Street, Whitechapel, Isle of Dogs and Woolwich.
The countdown to the construction has already started with preparatory works due to begin next year and main construction commencing in 2010. Crossrail is scheduled to open for services in 2017.
Mike Hawkes, Executive Director for Transportation at Heath Lambert, explains that the traditional risks which face such a scheme are accompanied by some unusual others.
“It is a huge and exciting project and with tenders already being sent out for the contractors and designers our work has already started.”
He adds that the project presents three core risks in terms of size and scale.
“The first is the tunnels,” explains Hawkes. “There will be three tunnels to be bored and with tunnelling there are always risks and challenges especially when you consider that these will be in the heart of a major city.
“The second is the fact that as part of the project there will be nine new stations constructed and some of those stations will be deep underground. In effect each station will have a core ‘box’ and the risks for the station construction are a considerable part of the project.
“Lastly is the rolling stock. The trains which will operate on the line are being built specially and they will be stored in preparation for the service to begin. It leaves us with a major accumulation issue should they be damaged or destroyed by fire or explosion prior to coming into service.”
However the fact that the scheme is cutting through the heart of London will also present additional risks.
Given the history of the city, the insurance programme also has to protect against the possibility that the tunnelling and construction work will be halted should they unearth areas of specific archaeological importance given the fact that settlers have occupied the London area for over two thousand years.
“The history aspect is a risk but we are also in a situation where the route will go close to existing London Underground tunnels and stations and there is the risk of impacting on their operation if there is any problems,” says Hawkes. “The other factor is that the Crossrail project will be well underway by the time London hosts the 2012 Olympics and areas such as the movement of earth from the tunnels may need to be handled carefully given the fact that the city will want to look pristine for the games.”
Hawkes adds that the risks would find themselves placed in London.
“It is fair to say that Lloyd’s and the rest of the London market will assume much of the risk,” he adds. “The major markets for these risks are in London and we would assume that they will be keen to play a part on the programme.”
Last updated on 16 Sep 2008
