Proposed management plan for the London Underground

2001-04-17 TfL's Bob Kiley condemns haste on PPP (Transport for London)

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date 23 November 2010
source Office of the PPP Arbiter
type Publication

The London Underground PPP Agreements, which commenced for Tube Lines in December 2002 and for Metronet in April 2003, were intended to run for 30 years. In the event, none of the three agreements survived their first reviews. First, Metronet BCV and SSL went into administration in 2007, following my decision not to award Metronet BCV payment for the additional costs of some £1 billion it had sought at an Extraordinary Review. Then the shareholders of Tube Lines agreed to sell their shares to TfL days before the second 7½ year Review Period was due to start on 1 July 2010, leaving the Periodic Review process incomplete.

Although the three PPP Agreements remain in place, they have been modified so that there are no matters which can be referred to me for directions. Also, the Parties to the Agreements (now all part of the TfL „family) have agreed that they will not seek guidance from me or my Office, and that they will not ask the Secretary of State to appoint another Arbiter when my appointment expires. So while the statutory functions and duties of the Arbiter remain in place, in practice there is no prospect of the Arbiter being asked to exercise those functions. In these circumstances, the Office of the PPP Arbiter closed on 15 October.

It is unlikely that a PPP quite like this will emerge in future: the House of Lord Economic Affairs Committee has, for example, concluded in its investigation into private finance projects that “the failure of the London Underground Metronet PPP gave private finance projects in general a bad name.” However, much of the work my Office undertook to assess the efficiency of the Infracos will be needed if the Mayor is to be assured of value for money. Indeed, the recent CSR settlement is underpinned by the Mayor's agreement to give the Independent Investment Programme Advisory Group a remit which picks up my work on benchmarking.

The purpose of this report is therefore two-fold: to record some of my key actions and decisions during the life of the Office, and to set out some of the lessons learnt from the approach my Office and I have adopted in the hope that these may be of use to IIPAG and others looking at the experience of the London Underground PPP.

[[for full report click on link in related documents]]

Railhub Archive ::: 2010-11-23 PPP-001