Ken Livingstone has today called on Tube maintenance contractor Metronet to seek an Extraordinary Review by the PPP Arbiter in order to resolve disputes over “massive cost overruns”.
The company controls two thirds of the Underground network via two subsidiary companies; Metronet Rail BCV which is responsible for the maintenance and renewal of the Bakerloo, Central, Victoria and Waterloo & City lines and Metronet Rail SSL responsible for the maintenance and renewal of the Sub-Surface lines, the Circle, District, Hammersmith & City, Metropolitan and East London lines.
A recent report by the PPP Arbiter concluded that “neither of the two Metronet Infracos has performed in line with the required standard over the period as a whole.”
Mayor Livingstone today said the report had “confirmed my view” that Metronet’s performance “must improve.”
The Mayor said the PPP contracts entered into by the Westminster Government “lack any real teeth” and that he had “reluctantly come to the conclusion that an Extraordinary Review by the PPP Arbiter is called for.”
Mr Livingstone called on the Arbiter to decide “how much of the cost overrun must be borne by the Metronet shareholders – Atkins, Balfour Beatty, Bombardier, EDF Energy and Thames Water” adding it was time “for Metronet’s shareholders to stand up to their responsibilities.”
A spokesman for the company said the question of additional costs are provided for in the PPP contracts and that “the sheer scale of the Tube’s renewal programme following decades of under-investment, the originators of the PPP provided a proper mechanism to deal with the question of additional and unforeseen costs.”
The spokesman said Metronet believed it was “in everyone’s interest, not least the taxpayer, to mutually agree the issues” and they were “working hard to achieve a commercial settlement with London Underground – but should there be no positive outcome, we shall pursue the ‘Extraordinary Review’ route to recover the money which is due to us.”
Mayor Livingstone said he was determined not to “allow the costs of Metronet’s failure to perform to fall on London.”
