Transport for London (TfL) is exploring the possibility of taxing landowners along the proposed Bakerloo line extension route to fund the £3.1bn project, New Civil Engineer can reveal.

TfL is carrying out a land value exercise to determine how much landowners along the route stand to benefit from the extension. This will enable it to calculate the size of levy it could impose on property owners along the route. TfL wants to extend the Bakerloo line in south London from Elephant & Castle to Lewisham via Old Kent Road and New Cross Gate.

A possible further extension beyond Lewisham to Hayes and Beckenham Junction has also been included in previous consultations. As part of the project the existing Elephant & Castle station will have to be expanded to accommodate more ticket barriers and a larger ticket hall.

Two new stations would also be built along the Old Kent Road as well as a new station underground at New Cross Gate, providing connections to national rail services, London Overground and buses. Work to improve the interchange at Lewisham is also included in the proposal to create better links with rail services and the DLR.

But with no government cash available to fund the project, TfL is exploring alternative funding options.

A TfL spokesperson said: “We are working with the mayor to make the case for steady and sustained investment in vital transport projects in London, such as the Bakerloo Line Extension and Upgrade.

“We are exploring all options in order to fund infrastructure projects to support the growth of London, including capturing a proportion of the land value that those projects would generate.”

Former Greater London Assembly Labour member Murad Qureshi believes a levy on local landowners is the only feasible way to fund the project.

“I am completely signed up to the extension of the Bakerloo line beyond Elephant & Castle to Lewisham and even further but l also think we need to upgrade the whole of the Bakerloo line and fund the project with a levy on surrounding land of the extension, as it’s unlikely to attract grants from central government in the political climate for up to the next 10 years,” Qureshi wrote on his website. “It appears the priority for the new government on infrastructural investment will be for connecting up the Northern towns to the nearest cities. So we will have to show other means of funding the extension proposed.”

He added: “Assuming the enhanced land value is greater than the build cost of the Bakerloo extension, a land levy should be introduced and be applied to the whole of the catchment area of the new extension with no need for contributions from existing taxpayers.”

TfL has previously used levies to fund projects, such as the £4.1bn raised through its supplementary business rate on large commercial properties within the Greater London area, which went towards funding Crossrail.

The Adam Smith Institute think tank believes that the Bakerloo line landowner levy would work. Adam Smith Institute research associate Charlie Paice said: “Rather than relying on central government handouts for infrastructure investment, this land levy will mean that those paying are the ones who stand to benefit as the value of their properties go up.

“If land owners aren’t prepared to pay for a project which will further increase their property values – then why should they expect taxpayers from the rest of the country to stump up their cash?”

If given approval the new Bakerloo line extension work could begin in 2023 and the line could be operating by 2029.

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