Major projects rising cost fears

Crossrail will cost about �5.5bn

Major building projects such as Crossrail and those linked to the 2012 Olympics could be delayed or cancelled because of rising costs, a report said.

Raw materials and labour costs have risen by 12% in the last year, the Royal Institution of Chartered Surveyors (Rics) study showed.

It said rising fuel and cement costs were having a dramatic effect on civil engineering projects.

Other affected projects could include Thameslink and the East London Line.

The �16bn Crossrail scheme, which will link Maidenhead in Berkshire to Shenfield in Essex, via central London, is due to be completed in 2017.

Serious threat

More than �5.5bn of government money is being put behind the venture.

The �5.5bn Thameslink project which will modernise the rail service and Transport for London speding �1bn to expand the East London Line from Whitechapel north to Highbury & Islington, and south to Crystal Palace and West Croydon.

Overall, with infrastructure output predicted to rise by 9% in 2008 and 7% in 2009, the industry is "well placed" to ride out the current economic downturn, said Joe Martin from the Rics.

"However, the industry is facing the possibility of a serious threat, caused by a combination of rising costs and the economic downturn, that could result in delays and, at worst, cancellation of some of these schemes," he said.

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