Tube maintenance company Metronet has called in the administrators after days of speculation surrounding the company’s future.
The company was responsible for the renewal of the Bakerloo, Central, Victoria, and Waterloo
& City lines under two contraversial PPP contracts.
Earlier this week the company failed to secure a a increase of £551 million in the money paid to it by London Underground.
In a move which sparked questions about the viability of the company Chris Bolt, the statutory Arbiter for the London Underground PPP Agreements, decided that the company was entitled to just £121 million extra.
Last night the company had refused to comment on reports that the administrators would be called in today. However in statement issued this morning the company said:
“The Boards of Metronet Rail BCV Limited and Metronet Rail SSL limited, today announced that they had asked the Mayor to seek the appointment of a PPP Administrator for both companies. The announcement follows a period of financial uncertainty for Metronet.
On Monday 16 July, Chris Bolt the PPP Arbiter announced that his draft Interim Direction, as part of an Extraordinary Review process which commenced for Metronet Rail BCV at the end of June, would result in an increase in the Infrastructure Service Charge to be received by that company of £121 million, beginning in January 2008.
Metronet Rail BCV requires additional funding to enable it to carry out its contractual obligations during the period of the Extraordinary Review.
This company has now established that it has no access to such further funds. Metronet Rail BCV will therefore be unable to carry out its contract and has asked the Mayor to seek the appointment of a PPP Administrator.
Applying the logic of the PPP Arbiter’s draft direction to the circumstances of Metronet Rail SSL, the Board of this infrastructure company has come to the conclusion that any application for Extraordinary Review and Interim Determination would come to a similar position. It has therefore also asked the Mayor to seek the appointment of a PPP Administrator for Metronet Rail SSL.
Mr Bolt’s office say he awaits the appointment of an Administrator and any decisions the Administrator may make regarding Metronet BCV’s reference for an Extraordinary Review.
Meanwhile the Arbiter will continue to work towards publishing by 31 July his final directions on Metronet BCV’s request for increased stage payments for the
next 12 months.”
Mayor of London Ken Livingstone said he had “directed Transport for
London, under the powers given to me under the Greater London Authority
Act, to petition the courts to make a PPP administration order in
relation to Metronet.”
Mr Livingstone assured passengers that “all trains will continue to run and all stations will remain open.”
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Metronet Request Extraordinary Review – 30th Jun 2007
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