It’s been announced that Transport for London (TfL), the capital’s transport management body, has lodged a formal Expression of Interest with the PPP Administrator of the two Metronet companies, BCV and SSL, in order that it may take control of the companies on a temporary basis.
Metronet collapsed after it failed to secure an increase of £551 million in the money paid to it by London Underground. Chris Bolt, the statutory Arbiter for the London Underground PPP Agreements, decided that the company was entitled to just £121 million extra.
In a statement issued yesterday TfL says it “believes it is in the best interests of all parties for an exit from Administration as quickly as possible. This is the best way to maintain the continued safe operation of the Tube network and to mitigate the performance and cost risks that inevitably come with such a situation.”
While under Transport for London’s control, Metronet’s Public Private Partnership and subsidiary contracts would be restructured to “better meet Transport for London’s investment priorities – namely track, train and signalling upgrades to enhance capacity, along with station security and communications improvements.”
London Underground Managing Director, Tim O’Toole said: “in dealing with the collapse of Metronet, and through the Administration process, we have had two key priorities. First, to ensure the continued safe and reliable operation of the Tube network for passengers. That has been achieved and I would like to pay tribute to the hard work and dedication shown by all Metronet and London Underground staff, as well as the Administrator and his team. We need to continue to work together for passengers.
“Secondly, following Administration, we seek to put in place a stable, economic and efficient structure that is better able to deliver Transport for London’s investment priorities that will lead to increased capacity on the Tube in future, along with station security and communications improvements.”
However the One London Party on the London Assembly said Londoners risked “going out of the frying pan and into the fire” if Transport for London is allowed to take over the contract.
One London leader Damian Hockney said “Londoners may very well find they’ve swapped one under-performing organisation for another that’s far worse.
“TfL, as a publicly-funded organisation, can never go into administration because it has a steady stream of taxpayers’ cash being pumped into it, which means it will never have any incentive to cut costs. If anything goes wrong, it just raises fares or increases its demands on the taxpayer.”
TfL says it anticipates that a formal offer could be made by September 30, 2007.