On Monday a press released issued by Mr Khan’s campaign listed “ending any further public funding for the Emirates Cable Car” as one of the ways he could help fund a £450m pledge to freeze fares for the next four years.
The Tooting MP later told LBC’s Nick Ferrari that he’d be happy for the scheme to close if it was unable to survive “without the subsidy of £5m per year”
The scheme’s £36m sponsorship deal with Emirate’s Airline made international headlines in July 2013 when this site revealed it contained a controversial anti-Israeli clause which was only dropped after widespread criticism forced both parties to rewrite their contract.
Although an early break clause in the contract allows TfL to walk away from the deal next year, a necessary step if the whole scheme is to be scrapped, doing so would force the agency to pay Emirates a £5m penalty.
In addition, TfL would lose the remainder of the sponsorship cash and incur additional contracted costs to remove Emirates’ branding from the cable car’s cabins, terminals, website and publicity material.
TfL’s own figures show the total cost of ending the deal would exceed £20m, including sacrificing more than £14m in sponsorship money, wiping out all of the savings Mr Khan’s statement implied he’d make.
Furthermore an analysis of Transport for London’s audited accounts show that, instead of receiving a “subsidy”, the scheme’s fare revenue met or exceeded operating costs in each of the last three financial years.
In its first nine months of operation, the period covered by TfL’s 2012/13 accounts, just under two million passengers were carried, generating fares revenue of £6m.
During 2013/14 passengers numbers, which were boosted the previous year by the scheme’s novelty and London’s hosting of the Olympics, fell to 1.5 million passengers with fare revenue of £5m.
Passenger numbers remained flat in 2014/15 at 1.5 million but revenue increased from £5 million to £6 million.
Asked to comment on the scheme’s published finances, a spokesman for Mr Khan’s campaign said: “We’ll review it…and the likeliest option is it closing in 2021”.
Peter says
Mr Khan and his team are already showing their lack of commercial understanding and would do untold damage to London’s ecomomy if Mr Khan becomes Mayor.
It’s the same old election bribery tactics: “Vote for us and we’ll freeze fares for four years”. The problem with this is that tax payers have to fund such schemes and public debt grows.
This strategy is irresponsible and most hurts the very people Mr Khan purports to represent!
Greg Tingey says
Creative Accounting strikes again ….
Another 5 years in which to have an air-crash, then?