Posted 8th March 2010 | 3 Comments
Countdown is on to crucial £400m Tube Lines decision
THE PPP Arbiter Chris Bolt is due to publish a key decision about the funding of LUL contractor Tube Lines on Wednesday. His findings will be a major factor in helping to shape the Underground over the next few years (writes the Railnews Metro reporter).
At the heart of the matter is the budget for Tube Lines' next Control Period, which is about to start. TL's bid for £5.7 billion was met with an offer of £4 billion from LUL last year, and the Arbiter has already indicated in a provisional decision that he is minded to increase the amount to £4.4 billion.
But this is still way below the Tube Lines figure, and the situation has been complicated by the fact that a Freedom of Information Act request by Tube Lines revealed that Transport for London is spending £20 million for each kilometre of the Victoria Line upgrade, while Tube Lines is allocating £10 million per km for upgrading the Northern Line. The revelation has sparked a dispute about the relative efficiencies of Transport for London's in-house department Metronet, which is responsible for most of the system, including the Victoria Line. Its sole external contractor Tube Lines is responsible only for the Jubilee, Northern and Piccadilly Lines.
Metronet itself is a relic of the failed PPP contractor of the same name which failed in July 2007, and some commentators have been speculating that a similar crisis may now lie ahead for Tube Lines unless the funding dispute can be resolved.
If the Arbiter rules on Wednesday that the budget is to be £4.4 million, there may be not one but two crises. Tube Lines will be obliged to carry out its contractual obligations with a budget shortfall of £1.3 billion, while London Underground may be forced to make cuts in services, reduce other projects or increase fares to find the additional £400 million it will need.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Dr Philip Davies, Wareham, Dorset
It's an open secret that LUL were never happy with the PPP contractors and want to have all the work back in-house. With that conflict of interest is it any surprise that LUL met the Tube Lines bid with a significantly lower offer? It would be in LULs strategic interests if Tube Lines had a company-breaking shortfall and couldn't meet its obligations.
stacey white, london
When LU submitted their £4bn proposal they got the length of the northern line wrong. Given that they dont know how long their own bits of string are its not surprising that their in house costs are so high.
TL have done an OK job so far - there are fewer delays than there used to be (i've lived with the northern line for over a decade and its definately better now than it was a few years ago). More stations have escalators and lifts and are in better condition than they have been for some time.
Joel Kosminsky, London, Britain
A 2-to-1 ratio suggests possibly Tube Lines under-estimated the costs? If the Vic' Line work is being delivered close to plan, and if Tube Lines' work isn't, the level of resourcing may matter in a different way to just 'A' doing it cheaper than 'B'? Face-value statistics are dangerous creatures.