Transport for London’s takeover of south London’s suburban rail lines will have a “transformational” effect for beleaguered commuters.

So says Lord Adonis , chairman of the National Infrastructure Commission which is investigating the viability of Crossrail 2 and is due to report to Government on its recommendations in the next few weeks.

Crossrail 2 aims to link the south of London to the north west, including Hackney. However, Lord Adonis says he believes providing a metro-style service in the London suburbs, incorporating rail lines into the Overground, could have a bigger impact than Crossrail 2.

He told the London Assembly: “That could have the effect of providing a Crossrail 3 in south London. And because many of those services are massively under-utilised, you could have Crossrail 3, 4, 5, 6 – it can’t come soon enough.

“If I had to say what the most significant infrastructure priorities over the next 15 years I would probably highlight the capacity to transform the suburban heavy rail lines as the single most important and cost effective improvement.”

The decision for TfL to take over suburban rail franchises when they come up for renewal has been universally welcomed.

Commuters in the south east have suffered poor services and overcrowding for years and the crisis has been made worse by the botched upgrade of London Bridge station, which compounded delays.

Rail in south London has seen a huge rise in demand over the last 10 years – a 95% increase in passengers at Zone 2 stations and 112% at Zone 3 stations in the south of the city.

TfL has said it would aim to absorb suburban rail services into the popular Overground system, attempting to replicate frequency and pricing structures. The service could reach as far south as Sevenoaks.

Lord Adonis said: “That would transform the capacity and quality of service offered to commuters who are very often offered a substandard service on those lines.

“You will have an authority whose first priority is the London suburban services and that hasn’t been the case. The privatised rail companies have seen the suburban services often as the poor relation of long distance services.”

The Crossrail effect

CGIs of the new-look Whitechapel station when Crossrail arrives

Crossrail 1 has proved such a success in terms of unlocking land and boosting property values that it has become the model for Crossrail 2.

The east-west link was primarily commissioned as a transport project but the way it has regenerated areas such as the Royal Docks and Woolwich signals a shift in the way projects will be viewed in future.

The planned Crossrail 2 – which could be open by 2030 – links the south and north east – and in the Lea Valley alone is projected to unlock land for 200,000 new homes.

Lord Adonis said: “It isn’t being conceived nor is it being considered as a conventional transport scheme, it is a scheme with major potential for regeneration. Housing supply is absolutely central to the whole plan.”

He said that the business model proposed to the Treasury recognised that much of the Government investment would be returned through stamp duty and income tax if property values rose and businesses moved in to brownfield sites along the route. The proposal is for Government to fund 50% of the £30billion scheme and London the other 50%, as with Crossrail 1.

Sir Peter Hendy, chairman of Network Rail , said the next step was for Lord Adonis’s NIC to recommend Government funding for the project. A decision on the outcome is likely to be revealed in the Budget next month.

Sir Peter said: “Just like with Crossrail 1 by the time Crossrail 2 gets anywhere near delivery it will become quite apparent that nothing else will do instead of it so we better just get on with it.”

Lord Adonis said that river crossings in east London also fit the same business model. He said a range of crossings in east London was vital for regeneration, with the Silvertown tunnel particularly pressing.

He said: “It’s not only important for transport users but in terms of unlocking housing – it could in due course be as significant as Crossrail 2.”