First Tube PPP contract signed

With enough London people reading the Boards, I thought it'd be better to post this here than on the regional board:

First tube PPP contract signed

Matthew Tempest, political correspondent
Tuesday December 31, 2002

The first half of the highly controversial part-privatisation of the London's tube network was completed today when a contract to take over sections of the network was signed.

The move enables the Tube Lines consortium, which includes the financially troubled Amey group, to assume responsibility for London Underground's Jubilee, Northern and Piccadilly lines.

The Metronet group, the other consortium involved, is expected to take over the rest of the tube within the next few weeks.

Fiercely resisted by London's mayor, Ken Livingstone, the 30-year public-private partnership (PPP) plan for the tube will see a £16bn investment in the system over the next 15 years.

However, critics have pointed out that the three-decade contracts are virtually a licence to print money, with the government underwriting failures and contingencies, and the companies only making modest promises on extra rolling stock and "greater cleanliness" of stations and trains.

They also fear that some consortia see the project as much as a real estate investment and retail opportunity, rather than a duty to improve the transport infrastructure of the capital.

Rail unions have also opposed the scheme on safety grounds and have staged a series of short strikes over the issue.

Earlier this month the transport secretary, Alistair Darling, effectively blocked a fresh legal challenge from Mr Livingstone by indemnifying the consortia against any effect of any court action.

Under the PPP deal, Mr Darling is due to hand over London Underground to Mr Livingstone's Transport for London (TfL) body. But Mr Darling has said he will not do this if any court action was going ahead.

Just before Christmas, Mr Darling told MPs that the start-up costs for PPP, including such items as legal fees, had been around £500m - a figure that was widely condemned by opponents.

Mr Darling said today: "I welcome the news that London Underground has completed the deal with Tube Lines.

"This is good news for Londoners, at long last marking the start of the biggest improvement programme the tube has ever seen."

The Liberal Democrat transport spokesman, Tom Brake, said: "PPP is a monument to the stubbornness of Gordon Brown who is the only supporter of the part-privatisation of the tube."

He went on: "Londoners, who are overwhelmingly opposed to the deal, will see this as a slap in the face. By the government's own admission there is no guarantee that this 30-year contract will represent value for money.

"With Amey looking increasingly fragile, there is no guarantee that the contract will last the duration."

Tube Lines chief executive Terry Morgan said: "Today is one of the most important days in the history of the tube, the day in which the multi-billion pound regeneration of the underground finally commences.

"Starting from now, Tube Lines will be spending an average of £1.6m on a day on the maintenance and upgrade of the Jubilee, Northern and Piccadilly lines."

He went on: "For passengers, the first improvements to be witnessed will be a reduction in the number of delays and a substantial improvement in the cleanliness of the trains and stations.

"Within the first 12 months, we will cut delays by nearly 10% across the three lines, saving passengers 430,000 hours in the first year alone. We will also transform the cleaning regime with immediate effect, implementing 'deep cleans' of trains and stations much more frequently than at present."

Mr Morgan said that "within weeks" Tube Lines would place an order for 59 additional train carriages for the Jubilee Line which will allow a lengthening of each train from six to seven cars within the next three years.

He went on: "Within the first year, we will also be awarding a contract for new signalling systems for the Jubilee and Northern lines which will allow us to substantially increase service capability on these lines.

"These systems take time to design, manufacture and install, but the Jubilee Line system will be in place by 2009, and the Northern Line system in 2011.

"The modernisation of the underground has been long in the planning, and ... we are delighted that we can finally get cracking."

London Underground said today the deal "heralded the start of a new partnership - and new funding - for maintaining and upgrading the network".

LU added that arrangements for the transfer of the rest of the Tube to Metronet were expected to be finalised in spring 2003.

The part-privatisation is seen as the brainchild of the chancellor, and has been opposed by the transport select committee, the Liberal Democrats, several Labour London MPs and, of course, the mayor of London.

from The Guardian

Personally, I think it's going to be a failure and put more pressure on what's an already struggling system. Especially since Trube Lines consortium includes Amey, I won't be the least bit surprised when the the government has to step in to bail them out.

It's going to cause serious disruption, and hopefully a strong backlash against PPP's, making it politically unwise for governments to ever endorse them again.

Good luck getting to work, y'all.