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Cancellation worries over Crossrail project may hit Ballymore

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Heathrow Airport owners BAA have delayed publicly committing £4.1 billion to Crossrail. Photo: EDMOND TERAKOPIAN/AFP/Getty Images

Heathrow Airport owners BAA have delayed publicly committing £4.1 billion to Crossrail. Photo: EDMOND TERAKOPIAN/AFP/Getty Images

Heathrow Airport owners BAA have delayed publicly committing £4.1 billion to Crossrail. Photo: EDMOND TERAKOPIAN/AFP/Getty Images

Ballymore Properties could be affected by increased concern that the vital London Crossrail transportation project may be cancelled.

The respected Royal Institute of Chartered Surveyors (RICS) yesterday warned that spiralling construction costs could lead to the cancellation of large public infrastructure projects, including the €20bn Crossrail project.

As well as being involved in a major Isle of Dogs site which is due to benefit from Crossrail, Ballymore may also be affected by the news from RICS's Building Cost Information Service report that raw materials and labour costs have risen by 12.2pc in the UK over the past year and are forecast to rise by a further 12.5pc over the next two years.

Construction work on Crossrail is due to begin in 2010, but when Heathrow owner BAA, the City of London Corporation and the Greater London Authority delayed publicly committing to raising £4.1bn (e5.2bn) towards the cost of the east-west London rail link, this led to fears that the deal could unravel or be delayed by up to five years. Nevertheless Transport for London insisted the funding was secure.

The UK government estimates that Crossrail will add at least £20bn (e25.4bn) to the UK's economy while generating an extra 30,000 jobs.

Sean Mulryan's Ballymore is a development partner with the Canary Wharf development company in a joint venture which is developing €5.6bn, 6.5m sq ft of mixed-use space with British Waterways at Wood Wharf near Canary Wharf, which is expected to be the major winner from Crossrail.

It would increase rail capacity to the Isle of Dogs by 54pc. Canary Wharf Group is thought to have contributed around £500m (e636m) towards the cost of the project.

Wood Wharf is set to become one of the biggest developments in Britain over the next decade containing 1,400 new homes and commercial, retail, recreational and community facilities. This would make the new cityscape the highest density building project in London.

UK state-owned British Waterways has a 50pc stake in Wood Wharf, with the remainder divided equally between Ballymore and Canary Wharf Group, the Docklands developer.

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