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Railhub Archive
2001-11-15 TfL-002
Transport for London


Summary of PPP Performance Regime

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London Transport
Transport for London
public-private partnerships

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Transport for London

Summary of PPP Performance Regime

related documents

2001-02-23 Report to Ken Livingstone, Mayor of London, on the London Underground’s proposed PPP (Transport for London)

2001-02-02 Prescott and Kiley agree to work together on the London Underground Public Private Partnership (Department of the Environment, Transport and the Regions)


15 November 2001
source Transport for London
type Statement

The PPP performance regime taken as a whole is staggering in its complexity. And deploying it—placing the very future of the Underground and indeed London’s lifeblood and economy at its mercy—is a risky endeavour and a dangerous game.

Consider the historic models of how other aging metro systems have been turned around. Putting it simply, problem areas were identified by management, various capital works and maintenance solutions were identified and prioritised by management, and were then implemented, often by private contractors. The contractors would be paid as they delivered desired products, and would be responsible if the products didn’t work as promised (warranty and reliability requirements). Given stable funding, the record is clear. These programmes work.


Under PPP, the Infracos will be paid by LUL for maintaining the trains, stations, track and signals under contract for 30 years. LUL will continue to staff the stations and operate the trains.

However, the PPP contract does not provide for payment to the Infracos based on concrete deliverables such as a new fleet of trains or carrying out specific and routine track maintenance.

Instead, LUL is forced to pay the Infracos on the basis of how the Underground is performing, and whether the Infracos are responsible for the improvement or deterioration of that performance. How the Infracos attempt to deliver the performance specified in the contracts is almost entirely up to the Infraco.

Because there is no agreed checklist of work that the Infracos have to deliver, LUL has had to develop a ‘performance regime’ to judge how well or badly the Infracos are doing their job. This regime attempts to measure thousands of minute aspects of the Underground’s operation that affect journey times and ambience and other elements that comprise the “Underground Experience”. Once the data is collected and agreement is reached on who is responsible for what “incidents” arising on the Underground, the relevant data is plugged into numerous complex formulae to determine whether the Infracos’ performance meets a set of benchmarks laid out in the contract documentation. This regime will determine the payments (both penalties and bonuses) that LUL makes to the Infracos.

Thus, in order to quantify the Infracos’ performance, LUL has had to create and incorporate into the contracts:
• A very complex mathematical model of the entire Underground system;
• and a system for attributing responsibility for “incidents” on the system.

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Railhub Archive ::: 2001-11-15 TfL-002


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