March 8 (Bloomberg) -- Greg Reichmann used to mine coal for Xstrata Plc in Australia’s Queensland state. Now he’s a tunneler under Mayfair, the most expensive place in the world to rent office space and home to London’s hedge-fund district.
Reichmann, 32, is one of several hundred former miners drafted in by Crossrail Ltd. to build a rail network connecting Heathrow, the world’s busiest international airport, with the West End entertainment district and offices in the City of London and Canary Wharf. At an estimated 15 billion pounds ($23 billion), it’s Europe’s largest construction project.
“It differs from mining because you’re installing an asset rather than removing it,” said Reichmann, a Crossrail assistant project manager, fighting to be heard over the roar of a conveyor belt carrying tons of mud, clay and earth away from a tunnel face 25 meters (82 feet) below the city’s Hyde Park. “It’s a lot cleaner than coal mining.”
London was the first city in the world to have an underground railway when the Metropolitan line opened 150 years ago. Yet the scale of the current project has exposed a dearth of modern tunneling expertise in the U.K., which hasn’t seen subterranean works on this scale since the Channel Tunnel was completed in 1994, connecting England with France.
The 118-kilometer (73-mile) railroad will carry as many as 48 trains an hour, with each train carrying as many as 1,500 passengers, and will boost London’s rail capacity by 10 percent when it opens in 2018. Each platform is 250 meters long, more than twice the length of Wembley Stadium’s soccer field.
Crossrail, a wholly owned subsidiary of Transport for London, created a specialist academy to train more than 2,000 underground workers, and recruiting miners who previously worked as far afield as Niger and South Africa.
“The reality is that with tunneling on this size and scale, the resources are not here at the moment,” said Andrew Wolstenholme, chief executive officer of Crossrail. The project always envisaged training its own subsurface workers, said the former officer in the British Army’s Royal Engineers and Programme Director for Heathrow’s fifth terminal construction.
As well as transporting fliers to Heathrow from London’s Canary Wharf financial district in about 40 minutes, a journey that currently takes about an hour, according to Transport for London, the project may add as much as 5.5 billion pounds to the value of real estate in the U.K. capital, according to a study by property consultant GVA Grimley Ltd. commissioned by Crossrail.
Companies including Derwent London Plc and Land Securities Plc are betting on the railroad’s success with office and residential developments adding to the more than 3 million square meters (32 million square feet) of property planned by Crossrail itself.
The value of homes near Crossrail stations may increase by 25 percent in central London and by 20 percent in the city’s suburbs, the GVA Grimley study found.
London will get nine new stations, including one at Tottenham Court Road, where Derwent and Land Securities are buying land and developing new offices and residential property.
Land Securities, the U.K.’s biggest real estate investment trust, won support from planning officers to build stores and 18 apartments on Oxford Street near the entrance to the Tottenham Court Road Crossrail station.
“There’s big demand for space in the West End and there hasn’t been a great deal of development,” said Derwent CEO John Burns. “There’s more action going on this year and the market can quite easily absorb it. As it becomes more popular, our rents are going higher.”
London’s West End ousted Hong Kong last year as the world’s most expensive location to lease offices. Companies spend the equivalent of $23,500 a year for each employee in the central London neighborhood compared with $22,190 in Hong Kong, broker DTZ said in a report.
Snaking their way from Hyde Park toward Tottenham Court Road are “Ada” and “Phyllis,” two of the eight 150-metre-long tunnel-boring machines each weighing 1,000 metric tons, weaving past sewers and existing subterranean train tracks at depths of meters or more.
The machines are named after Ada Lovelace, credited as one of the earliest computer scientists, and Phyllis Pearsall who walked 23,000 streets to create the city’s first atlas, known as the “London A-Z,” still a top seller today.
Life in the tunnels is noisy. The average decibel level is 86 and rises to 92, almost as loud as a jackhammer, at the cutting head of the tunnel, according to Jason Meadows, who gives safety briefings to those working underground.
“Our biggest problem is space,” Meadows said. “We’re knackered for space. We’ve got the motorway above us and the tube around us.”
Only 30 people are allowed in a tunnel at a time, with 20 of those operating the boring machines. Each wears a numbered brass token to ensure at least one means of identification is recoverable in the aftermath of a fire.
Reichmann is not the only former miner beneath the royal park’s Speakers’ Corner, where Edmund Beales’ Reform League clashed with Police in 1866 as he fought for political representation for the working class.
For Project Field Engineer Zac Bastin, 42, it’s a chance to use skills he honed in Africa closer to home.
“Working in London couldn’t be more different,” he said. “You get to be at home with the family.”
Bastin trained at the Camborne School of Mines on England’s southern coast in Cornwall before searching for platinum in South Africa for Anglo American Plc, and then working in west Africa’s gold mines. Working for Echo Bay Mines Ltd., since bought by Kinross Gold Corp., he faced the twin threats of a military coup and salmonella in Niger.
Miners try to take some comforts underground. Tea- and coffee-making paraphernalia sit on a dusty, mud-caked work bench next to a bottle of milk toward the end of the boring machine.
“It’s no different from any other building site,” said Bastin, who will be under Bond Street in about a week. “It’s just that the milk goes sour a bit quicker.”
Balfour Beatty Plc, the U.K.’s largest construction company, won a 130-million-pound contract to build two miles of Crossrail track and a new station in London’s southeast, according to a statement yesterday.
When Crossrail is completed in 2018, the miners and tunnelers will probably move on.
For Bastin, that may involve a return to Cornwall, once the source of two-thirds of the world’s copper. The region is striving to revive the industry as Celeste Mining Corp. seeks to resume work at South Crofty, the U.K.’s last tin mine to close, and Wolf Minerals Ltd. reopens a tungsten mine in Devon that was last used to make armaments to defeat Hitler’s Nazi Germany.
“Tunneling is a small world,” Wolstenholme, the Crossrail chief, said. “There will be a couple of hundred people who operate the tunnel boring machines. They will travel to where the next big project is.”