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Business leaders warn over nationalised PPP’s value for money

April 6, 2010 - Martin Hoscik@MayorWatch

Business leaders warn that nationalising Tube Lines could lead to increased costs
Business leaders warn that nationalising Tube Lines could lead to increased costs
London’s businesses have accused Boris Johnson of playing politics with the Tube PPP contract

In a letter published in the Evening Standard last week, Baroness Jo Valentine, Chief Executive of business group London First, warned that nationalisation of PPP contractor Tube Lines could lead to worse value for money.

Baroness Valentine’s letter follows publication of a report on the PPP system by the House of Commons Transport Select Committee.

That report branded the PPP scheme as “flawed” and found that maintenance carried out by London Underground, which took over failed contractor Metronet “is up to one third more expensive than similar work undertaken by Tube Lines.”

In her letter Valentine asks whether the Mayor’s determination to unpick the PPP contract is “more about politics than economics?”

She adds: “The only truly independent voice on this, the PPP Arbiter considers that while Tube Lines is by no means perfect, London Underground is almost certainly giving worse value for money. If Tube Lines were to be nationalised, it could cost more to deliver the same. Add the upheaval inevitable in any major changes like this and Boris risks spending more taxpayers’ cash for fewer new trains, less replacement signalling and a worse service to London commuters.”

Valentine has called on the Mayor and Tube Lines to work “with all London bodies to persuade the next Government that investing in this vital infrastructure must continue, to Londoners’ long-term benefit and this great capital’s future growth.”

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