Industry news

by Tony Collins, Managing Director, OPAL, the financial outsourcing company www.opal-uk.com

In the past outsourcing has, at times, been misrepresented in the media and consumers have been wary that it may generate unemployment. But – although it rarely makes the headlines - outsourcing can also create jobs. Almost every major multi-national study concludes that outsourcing actually creates more jobs than it destroys, for example Global Insight investigated the total process of offshoring and outsourcing in the US and found that more jobs were created than lost. It has also been highlighted by economists at the IMF that outsourcing jobs such as call centre, IT and back office staff does not create a negative effect on service industries. In financial services – the industry which OPAL spends most of its time working in – outsourcing has become an integral part of the business model, and many jobs have been created as a result.

Job Creation - how it works

Designed to reduce costs for businesses and consumers, outsourcing increases productivity and product investment, thus improving profitability and creating a demand for more new jobs. Therefore there are two sides to the argument, on one hand jobs will be cut and belts will tighten, but on the other these changes are necessary for a company to and remain competitive. When businesses outsource, the ultimate impact is often to create new, better quality jobs that pay more.

Key stats

In the UK, financial services outsourcing is continuing to grow as many seek to maintain a competitive edge whilst operating cost-effectively. It is estimated that the total UK outsourcing industry is currently worth £80 billion a year, and will continue to grow.

The UK Government is said to be looking to outsource more work, contradicting recent claims that outsourcing providers are facing a downturn because of the forthcoming Spending Review. Although the Government is trying to keep public sector jobs in the UK, offshoring is becoming increasingly popular in order to cut costs – and research carried out by the IMF shows that relocating British service jobs overseas has not led to a net loss of employment in the UK.

Financial Sourcing - Products to market

Here at OPAL, we provide third party administration for the financial services sector with clients including HBOS and Investec. We facilitate the need for our clients to launch financial products into the market place by providing full services including product development; marketing; IT; staff and resourcing. In order to do this we hire specialists in the field and since December 2008 we have employed 28 new members of staff and aim to increase that by the end of 2010. As such, we are a working example that outsourcing is creating jobs onshore in our St.Albans HQ.

The quarterly outsourcing confidence index released earlier this year by the NOA (National Outsourcing Association) included positive figures about the future of outsourcing, particularly in the financial sector. The report assessed confidence in outsourcing and found that the financial sector is the most positive with 71% convinced about the use of outsourcing in 2010 and thereafter. Business professional consultants, the Corporate Executive Board, conducted a survey amongst companies implementing restructuring plans and outsourcing was found to be the fourth most common activity taking place over the next twelve months.

The future looks bright for the outsourcing industry, after a few tough years financial services is thriving, innovating and dealing with regulation and outsourcing will play a major part in continuing this success. As providers look to bring new, more innovative products to market to help consumers repair their battered finances, the outsourcing industry will be there to help them along the way.

The IT help desk has often been under-appreciated – seen as a necessary function, but one offering little value beyond responding to basic user issues. Taking that view, however, can result in a missed opportunity for your business.

According to a recent study, the help desk function typically makes up less than five percent of an enterprise’s IT spend, but can represent almost 50% of the IT organization’s perceived value. Further, with the increasing adoption of ITIL and continuing trend towards globalization, the traditional level 1 IT help desk is re-emerging as the “global IT service desk” – and the heart of a successful global IT service management operation.

Here are three key ways that the service desk can deliver substantial value:

1. Information Gathering

As the central point of contact for resolving IT issues, the service desk can be a critical source of information as to what is working across an organization and what is not. Data collected at the service desk is both real-time and comprehensive – and because it comes primarily from business users, it provides important insight into how IT is working from the business user’s perspective. This is essential information for a results-oriented IT operation.

2. Reducing Costs, Increasing Quality

One effective way to use this information is by leveraging the ITIL discipline of ‘problem management’. This involves analyzing data to identify and resolve the root causes of incidents – helping to avoid them in the future and thereby boosting user productivity, increasing satisfaction and lowering costs.

Further, advancements in remote management technologies mean that the service desk can attend to many end-user computing issues that have traditionally required on-site personnel. This capability decreases down time and reduces the cost to resolve incidents.

Some companies have even extended the role of the service desk team to include broader Remote Infrastructure Management (RIM) – including network, server and application monitoring, and resolution responsibilities. This not only reduces staffing requirements, but can also enable service desk personnel to resolve issues more quickly and efficiently – before they impact the business.

For example, a global ophthalmic company with more than 15,000 employees in 90+ countries recently leveraged this RIM approach. As a result, it reduced alert resolution time by 30%, increased first level resolution to more than 80%, achieved end-user satisfaction of more than 90%, and exceeded its initial target for Return on Investment.

3. Enabling Globalization

Many companies are globalizing their service desk as an early step in a broader initiative to globalize IT. Implementing a global service desk with standardized processes and tools provides a full global view and a consistent approach to user support that can aid significantly in deploying global enterprise technologies. Additionally, when deploying new technologies, the service desk is an excellent advocate for the end user – working on the deployment team, helping to anticipate user challenges, and enabling proactive actions to achieve a smooth rollout, uninterrupted productivity and satisfied business users.

A global manufacturing company with more than 10,000 end users across Europe and North America took this approach ahead of deploying its first global applications. Not only did this approach help to ensure an effective implementation, but there was an added benefit – as the global service desk was implemented, it raised visibility to the performance of external vendors, helping the customer more effectively manage those vendors globally.

From cost reduction to increased efficiency to enabling globalization, realizing the full potential of the service desk can have a substantial impact on IT – and business – success.

Peter Keane is the EMEA Director of Performance Management Office & Business Process Improvement Team for TechTeam Global, Inc., a provider of IT and business process outsourcing.

Source: www.Techteam.com

Egypt hopes to see a tenfold increase in exports from its growing outsourcing industry by 2020 and will boost its focus on information technology entrepreneurship and co-ownership of intellectual property, the country's information technology minister said on Wednesday.

The new emphasis was outlined by Tarek Kamel at an investment conference in Cairo and offered a window into how the country wants to boost revenues and further diversify its economic base as it moves ahead with its reform program. Trade Minister Rachid Mohammed Rachid said officials are now more interested in opening new sectors to investments, hoping to eventually attract direct foreign investments of between $12-15 billion per year. Rachid said the priority was on maximizing the returns from state-run enterprises, including through restructuring and better management.

"We need to be able to consolidate. We want to be able to improve management. We want to be able to modernize our base of production," he said, reinforcing the government's desire to avoid further privatisation of the public sector, at least for the time being. Prime Minister Ahmed Nazif, echoed those remarks, stating: "We need growth more than others" — a reference to the government's challenge in meeting the needs of its 80 million citizens and demands for more jobs.

The information technology sector has emerged over the past few years as a new source of pride for Egypt. Kamel, the IT and communication minister, said the sector had brought in almost $1.1 billion in exports so far in 2010, and officials were projecting an increase to $10 billion by the end of the decade.

"We're still completely convinced that this is the way to continue to grow because infrastructure growth (in the sector) will not be enough anymore," Kamel said. Egypt needs to "take its rightful share out of that service economy." The minister also added that outsourcing, call centers and other support services were creating about 40,000 jobs per year but that Egypt was no longer content with simply focusing on the call center business. He said the real value lies in creating entrepreneurship in the information technology sector through co-ownership of intellectual property.

"We can also work on the higher end of the value chain," Kamel said. "It will make Egypt part of the knowledge economy worldwide." With officials setting up Egypt's new Center for Innovation and Entrepreneurship, and that there was already a pilot project under way with IBM on nanotechnology. Which Kamel hopes will attract foreign firms to similar projects in Egypt. The strategy for the entrepreneurship plan would be announced later in the year, he said.

The push for new revenue comes as Egyptian officials project economic growth could reach at least 6 percent this year, and inch up slightly higher in the coming year.

Egypt, the Arab world's most populous country, stumbled slightly during the world financial meltdown. Economic growth dropped from more than 7 percent before the crisis to slightly under 5 percent. Kamel said the IT sector saw sustained growth even during the crisis. Mobile phone penetration in Egypt now stands at more than 75 percent, with around 60 million subscribers, and broadband subscriptions are growing at about 25 percent annually, including both fixed and mobile services. He said there were around 1.1 million broadband household subscribers. But he discounted the possibility that a fourth mobile phone license may be offered before 2013, saying officials would rather wait until the fourth generation networks were more established. Kamel also said the country's first so-called "triple-play" license would be signed Wednesday. Officials have awarded two licenses for companies to provide a combined package with Internet, cable TV and phone services in gated communities springing up around Cairo.

Source:http://www.google.com/hostednews/ap/article/ALeqM5gwooP8DADMfWdrLrhW1ImLjbmGBQD9IHMLU80?docId=D9IHMLU80

GMT Corporation has created a strategic partnership with two leading UK organisations to deliver GMT Planet to public sector agencies in the UK. As a result of this partnership, PDMS, a UK IT and project management consultancy will act as a primary contractor to UK public sector agencies, whilst GMT and Ubertas Business Solutions (Ubertas), a UK supplier of strategic business solutions, provide product and implementation services, respectively.

GMT’s solutions are particularly well-suited for public sector organisations owing to the comprehensiveness of GMT’s flagship workforce optimisation solution, GMT Planet, its SureServices assured client lifecycle methodology, and a disciplined, well-documented implementation process. To date, GMT Planet is in use with a number of UK public sector and police agencies, such as West Midlands Police, Humberside Police, London Ambulance Service and many others.

“GMT is honoured to have been chosen by PDMS and Ubertas as their workforce optimisation solution partner,” said Simon Angove, chief executive officer of GMT. “Public sector agencies are under increasing budget pressure to stringently manage their costs whilst providing high quality service to the public. Philosophically, all three companies are very closely aligned in providing excellent value and assured project success for their customers, which is why this partnership makes sense.”

"We are confident that in this environment the need for more efficient delivery of technical and support services will lead to an increased demand for outsourcing," Babcock said.

The company has identified "significant additional opportunities" after being involved in talks with the Ministry of Defence and other government departments on potential outsourcing contracts in recent months.

Spending cuts will hit sales growth in the short term, the company acknowledged, but Babcock said it expected to meet its targets for the first half of the year.

Shares in the company, whose contracts include maintaining Britain's fleet of nuclear submarines, rose 23 to 574.5p on the news.

Babcock completed the acquisition of rival VT Group in July, and said its net debt position at the end of the half is likely to be lower than expected because of "excellent" cash generation.

The company is also confident of achieving the £50m of savings a year identified in its takeover offer. Babcock agreed to buy VT for £1.33bn in cash and shares in March.

The company said its modifications of the Rosyth dockyard to accommodate the final assembly of the Royal Navy's new aircraft carriers is mainly complete, with a 1,000 tonne crane installed. Training work for the three armed services has not been affected by the halt in new business awards during the spending review, and Babcock's rail maintenance business also improved.

Babcock's order book stands at £12bn, and the company has bids in for work worth another £5bn.

Source:http://www.telegraph.co.uk/finance/newsbysector/industry/engineering/8032897/Babcock-expects-to-benefit-from-Government-spending-cuts.html

The Mara Group’s IT company, Raps, announced it has formed a joint venture with Spanco, a leading provider of global business process outsourcing. The aim of the deal is to set up two world-class call centres in East Africa, one in Kampala, the other in Nairobi. Over 1,000 jobs will be created in the first phase and will lead to further employment. The call centre is aimed at providing vital support services to the telecommunications, financial services and government sector. The new company will operate under the name Raps Spanco.

“After seeing the success of call centers in India that employ millions, educate the youth and provide a base for them to kick-start their careers, we wanted to replicate this model within the ICT sector in East Africa,” says Mara’s managing director, Ashish Thakkar. Raps Uganda has been providing superior IT services for 15 years. The unparalleled knowledge and expertise of a highly skilled and trained workforce is the bedrock for delivering superior service quality to their clients.

Spanco employs over 10,000 people in call centres in India and has a turnover in excess of USD250m and Mara has in-depth knowledge of the local market conditions and how to train staff in Africa. The combination of these capacities will drive the growth of the business in the region. Spanco Chairman Kapil Puri firmly believes that the strength and know-how of Spanco in the sector will send a signal that East Africa is ready to do business. ‘Building a world-class call centre business here will allow us and our partners at Mara to lay the groundwork for opportunities in the private and public sectors’, he says.

The Mara Group sees the partnership attracting international clients to the region and by so doing create more and more local jobs and lead to investment in the ICT sector throughout Africa. Raps Spanco have been shortlisted for a BPO bid in countries like the DRC, Nairobi and Tanzania.

Source: http://www.ratio-magazine.com/201009303679/Corporate-Press-Releases/Uganda-Press-Releases-Raps-and-Spanco-Partnership-for-Outsourcing-Capacity-in-East-Africa.html

Tata Consultancy Services a leading IT services, business solutions and outsourcing organisation and British Airways announced the launch of their cutting-edge integrated IT solution called SWIFT MRO.

This partnership brings to the market a tried and tested solution that addresses the key MRO industry requirements, including compliance control, inventory management and maintenance operations. The solution, based on the latest SAP platform, leverages British Airways’ best practices with a focus on increasing productivity by minimizing manual intervention and increasing process automation—all through a simplified Graphical User Interface. The solution aims to eliminate non value-added activities and waste throughout the MRO operations.

Garry Copeland, British Airways’ Director of Engineering, said, “Having successfully implemented an engineering-wide system based on SAP, we have identified a number of opportunities to enhance the solution and make it significantly easier to implement and use. Working with TCS, we have created a team that combines MRO industry experience with technology expertise to continually improve the effectiveness of our system, and believe we can offer this outstanding product to the market.”

SWIFT MRO is an end-to-end solution, which is scalable to support both the current and future needs of the industry. The pre-configured solution also provides significant implementation costs savings compared to competing solutions, owing to the use of TCS’ proprietary solution accelerators.

“Evolving technologies and tougher regulations in the MRO industry mean that engineering and maintenance are becoming increasingly challenging. As proven through the advantages reaped by British Airways, SWIFT MRO will be a valuable tool for all organizations looking to improve functional performance in the MRO area while remaining efficient. Our continued collaboration will deliver continuous improvement to help us keep developing and enhancing the SWIFT MRO solution even further,” said Sukanya S, Head of Travel, Transportation and Hospitality, TCS.

Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognised as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 160,000 of the world’s best-trained IT consultants in 42 countries. The company generated consolidated revenues of over US $6.3 billion for fiscal year ended March 31, 2010 and is listed on the National Stock Exchange and Bombay Stock Exchange in India.

British Airways (BA) Engineering has a global reputation for engineering excellence and its technical and logistics expertise supports airline operations on every continent, 365 days a year, 24 hours a day. BA Engineering’s core capabilities are centered on Boeing 737, 747, 757, 767 and 777 aircraft, plus the Airbus A320 family aircraft.

BA Engineering provides full support for the British Airways fleet and a number of other airlines, with around 4,000 staff at more than 100 locations around the world. Fully equipped hangar facilities at the main maintenance bases at Heathrow, Gatwick and Glasgow airports are supported by workshops, technical and design services, and a comprehensive logistics network.

The company has also invested in three world-class operations based in South Wales that are dedicated to delivering heavy maintenance, avionics and interiors. The extensive maintenance network extends overseas with “line maintenance” stations established at airports around the globe. Again, these support British Airways and its subsidiaries together with a number of customer airlines.

Source: http://www.tcs.com/news_events/press_releases/Pages/TCS-British-Airways-launch-integrated-solution-MRO-industry.aspx

The first is just a way of getting somebody else to wield an axe you should wield yourself. If the service isn't adding value, don't provide it. If you need the service, you can cut costs yourself instead of paying an outsourcer to make a profit.

The latter is dangerous. Narrowing your areas of specialisation increases the risk of your company's obsolescence as technologies, vendors, or even your own customer markets shift. Focusing on core technologies or applications leaves you highly vulnerable to threats from competitors who adopt new technologies. What happens to your IT department when a core application becomes obsolete? Or if your business has to shift into new markets that need very different applications, or different implementations of those you have?

Too many IT departments focus on optimising performance, forgetting that their real objective is to make the business perform better. What most of them need is more room to experiment, try new technologies, try new applications, try new solutions, seek out new customer market opportunities and find ways to grow the business.

Use outsourcing to free up your resources for these tasks. Active sunsetting of old systems is critical, so use outsourcers to complete end-of-life projects cheaply and quickly. Press your IT shop into setting up white space projects-an approach to innovation in which people have permission to experiment in search of new value-added solutions and are given resources to prove the viability of such solutions.

Know which new technologies you need to deploy before you have to and get out of spending on legacy systems so you can be ready. Always keep your attention on doing the next big thing.

Source: http://www.computerworld.com/s/article/9188820/Outsourcing_for_the_Right_Reasons?source=rss_news

Capgemini Consulting, the global strategy and transformation consulting brand of the Capgemini Group, in cooperation with the Georgia Institute of Technology and global logistics provider, Panalpina, today announced the findings of the 15th Annual Third-Party Logistics (3PL) Study, examining the global market for 3PL services. The report reveals that 3PLs continue to provide important strategic and operational value to shippers throughout the world. However, significant uncertainty about the global economy has impacted spending, with an average of 11 percent of company sales revenues devoted to logistics, and an average of 42 percent of that directed to the outsourcing of logistics services, a decrease of 10 to 15 percentage points from recent years. At the same time, 65 percent of shippers reported an increase in the use of outsourced logistics services relative to total logistics services, suggesting that while outsourcing may have increased, expenditure on 3PL services overall has decreased.

The 2010 Third-Party Logistics Study is based on almost 1,900 responses from both shippers and logistics service providers in regions including North America, Europe, Asia-Pacific and Latin America, and also provides an in-depth look at the life sciences and fast-moving consumer goods (FMCG) industries. It reveals continued progress and improvement in the shipper-3PL relationship, with 89 percent of shipper respondents overall viewing their 3PL relationships as generally successful and 68 percent indicating that 3PLs help provide them with new and innovative ways to improve operations. However, the report’s findings show that shippers continue their tendency to outsource transactional, operational and repetitive activities and less so those that are strategic, customer-facing and IT-intensive despite a large proportion of 3PLs offering more advanced services.

“Many shippers regard logistics and supply chain management as key components of their overall business success. Increased use of outsourcing and high satisfaction levels suggest that 3PLs can certainly take some credit for helping shippers to weather the economic storm,” said Dr. C. John Langley Jr., Professor of Supply Chain Management, Georgia Institute of Technology. “Despite a challenging environment, 3PLs have an opportunity to continue to mature and grow by offering an increasing number of value-added services for shippers.”

One of the critical capabilities most highly valued by shippers in their 3PL provider is accurate reporting and analysis of total landed cost (TLC) – the sum of all costs associated with making and delivering products to the point where they produce revenue. The benefits of solid TLC calculations include more agility and confidence in decision making, better insight into the financial performance of products and partners and improved supply chain visibility. However, despite the relatively high number of shipper respondents reporting an extensive use of TLC (45 percent), the precision and level of detail of those calculations differ widely.

Calculating the TLC of materials and finished goods is not always an easy task. Difficulty in defining all the factors contributing to total cost, and then obtaining all the necessary data, can be challenging. Too often, businesses rely on only partial data or inaccurate estimates that can lead to incorrect results, with 58 percent of 3PLs reporting a hesitance from shippers to share information with them. That might be the reason why, despite the high value of TLC calculations, just 23 percent of 3PL respondents reported providing extensive TLC analysis to their customers. This level of interaction requires a high level of trust, and considerable discussion is required among 3PLs and their customers to better understand the factors, roles and KPIs to be used in a shared end-to-end calculation effort.

“TLC enables companies to capture both the obvious and hidden costs associated with product movement, revealing the true cost of sourcing and logistics decisions,” said Dennis Wereldsma, Global Transportation Sector Lead, Capgemini. “Transforming from basic to more sophisticated TLC application requires C-level leadership, process change and systems transformation. However, while TLC is highly important, because of the complexities, TLC adoption must be approached as an evolutionary, rather than revolutionary process.”

Spotlight: 3PL in the Life Sciences Industry- Within the Life Sciences industry, careful and expedient handling is often critical for product safety and because of this, control and visibility is essential. Logistics challenges here include product integrity and compliance requirements, an inherently complex trading partner ecosystem and demanding customer service and cost requirements. 54 percent of life sciences shippers surveyed felt the complexity of the supply chain model represents a significant challenge, but 87 percent felt 3PLs could add significant value here by linking together the various different parties involved. In addition, 62 percent of shippers within the Life Sciences industry cite ensuring product quality as a significant challenge and rank quality procedures highly (70 percent) as a service they want 3PLs to provide. Shipment visibility, quality and compliance procedures, stringent inventory control, temperature control capabilities and security are important steps to ensure product integrity, prevent counterfeiting and ensure safe delivery, and momentum is moving towards the use of RFID tags here. Indeed, around half of shipper and 3PL respondents agree that there is a strong business case for RFID in Life Sciences.

Spotlight: 3PL in the Fast-Moving Consumer Goods (FMCG) Industry- Large volumes and low margins mean FMCG companies must respond quickly to deliver in-demand, on-trend products to increasingly demanding shoppers. After cost reduction, FMCG companies’ biggest priorities for logistics include perfect order fulfillment (87 percent), rapidly sensing and responding to changes in consumer demand (83 percent) and shortening new product time-to-market and supply chain integration (81 percent). Also, as sustainability grows in importance for consumers, shippers’ interest in strategies such as improving shipment density and load utilization has also increased. Shippers within the FMCG industry value the role 3PLs play here as well as with reducing costs and dealing with supply chain disruption although are less likely to see 3PLs playing a key role in shortening new product time-to-market and supply chain integration. FMCG shippers’ efforts to reduce logistics costs include warehouse and transportation sharing. Two-thirds of those engaging in these strategies have recognized cost savings but this has been limited, with 52 percent of respondents recognizing less than 5 percent cost savings.

“The differences in the priorities reported by shippers in the Life Sciences and FMCG industries show how important it is for 3PL providers to provide industry specific solutions and to work closely with their customers to really understand their needs and provide the best possible service, ultimately helping contribute to their overall business success,” said Sven Hoemmken, Global Head of Sales, Panalpina.

About the 2010 Third-Party Logistics Study- 1,879 logistics executives from both 3PL users and providers in North America, Europe, Asia-Pacific and Latin America, as well as other regions and geographies, participated in the 2010 Third-Party Logistics Study via a web-based survey. The findings were supplemented with a significant number of focus interviews with industry observers and experts, primarily relating to the special topics identified for this year. A facilitated workshop was also conducted where shipper participants collaborated on shared issues to help provide a better understanding of the survey’s results and to gain their valuable perspective as 3PL users.

About Capgemini- Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs 95,000 people worldwide.

More information is available at www.capgemini.com.

Source:http://www.uk.capgemini.com/news/pr/pr2144/

Crossrail has identified potential savings worth hundreds of millions of pounds.The company building a new line across London will reveal today that it can point to significant possible savings over the construction of stations in the West End and the City as well as the main tunnels, due to be built from late next year.

An insider revealed that hundreds of millions of pounds could be shaved from the £15.9 billion budget when Crossrail presents the Government with an updated delivery cost estimate by the end of the year. Since January, the company has put every facet under review and has identified station design and tunnelling as key areas where savings can be made. Canary Wharf station has been redesigned, along with Whitechapel, with savings of £30 million. Light fittings, lifts, escalators, signs and other components will be standardised.

One source said: “Crossrail is looking to save several hundred million on the new stations alone. Everything is getting looked at to see where savings can be found, including the major tunnel contracts, and this is putting pressure on the construction industry to drive down costs. Major infrastructure schemes such as Crossrail will be scarce for the next few years and there is a huge amount of competition to win work from Crossrail.” Executives are confident that the railway will survive deep spending cuts expected to hit the Department for Transport in the spending review. However, they are acutely aware of the political imperative to keep costs down. Since April, the biggest companies in London have paid a supplementary business rate of 2p in the pound to raise £3.5 billion over the next 30 years. The DfT has pledged £5.1 billion, Transport for London £2.7 billion, Network Rail will undertake works worth £2.3 billion and BAA, the airports operator, £230 million. So far, £2 billion has been spent on a project first mooted in the 1990s, shelved by the Conservatives, then revived by Labour.

The Government and the Mayor of London are publicly committed to Crossrail.

Philip Hammond, the Transport Secretary, said: “Obviously the budget is under constant review ... but we want to see this project delivered in its entirety.”

Terry Morgan, the Crossrail chairman, said: “Sensible efficiency savings will be made at every opportunity.” Crossrail and the DfT say that the railway must be built in full from Maidenhead and Heathrow in the west, through 21km of tunnels beneath Central London to Shenfield and Abbey Wood in the east. However, financiers predict that the extremities may be clipped to save money.The procurement of 60 trains will begin this year. The 200 metre-long, ten-carriage trains are expected to carry up to 200 million people in the first year of operation.

Source:http://www.thetimes.co.uk/tto/business/industries/transport/article2741892.ece