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1444 Hrs GMTLondon
Wednesday
10 March 2010
Editor © Muhammad Haque
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Tube misery as two million passengers face delays after funding slashed
Dick Murray and Pippa Crerar10.03.10
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Two million passengers who use the Jubilee, Northern and Piccadilly lines face years of delays after a major row broke out today over the amount that will be spent on the Tube network.
Major upgrades to the three lines are under threat after the official in charge of funding ruled on the budget for the next seven years.
The company Tube Lines was ordered to cut spending by £1.3 billion, putting at risk plans for new, faster and cleaner trains, improved signalling and refurbishing stations.
It is feared that key works such as the upgrade of the Northern line to increase capacity by 20 per cent and reducing journey times by 18 per cent will not be completed in time for the 2012 Olympics.
Plans to increase capacity on the Piccadilly line by 28 per cent and reduce journey times by 22 per cent could also stall. Other projects include the upgrading of 50 miles of track, renewing 115 sets of points and crossings and repainting and smartening up 100 stations.
Chris Bolt, the independent arbiter of the public private partnership system that funds work on the Tube, ruled that spending on the three lines should be £4.46 billion. This is £1.3 billion less than the figure wanted by Tube Lines but about £460 million more than London Underground said it could afford.
Mr Bolt, appointed by Transport Secretary Lord Adonis, has instructed LU to fund the shortfall from its own budget— rather than Tube Lines raising the money from the markets — meaning the taxpayer and passengers will absorb it. Boris Johnsonaccused Tube Lines of “daylight robbery” over its demands for extra cash and threatened legal action. The Mayor said: “Londoners will also be outraged that the Tube upgrades promised to them are now threatened. Simply put, we are being asked to write a blank cheque to prop up an ailing and failing Tube Lines.
“We will fight this and are seeking advice on the arbiter's idea to pass Tube Lines' obligations to raise finance on to London's fare and taxpayers. We are examining all our options, including legal remedies.” Andrew Cleaves, Tube Lines chief executive, admitted the move made it more difficult to deliver improvements and upgrades.
He said: “We consider that this decision could present Tube Lines with a significant challenge in its efforts to deliver the investment in the Tube that the system continues to require.” But he told the Standard it was “perfectly realistic” to get costs within London Underground's budget —though they would then have to make tough choices on where to prioritise work.
The funding decision raises the possibility that Tube Lines could follow the other PPP-funded consortium, Metronet, into administration.
Transport for London is so worried it has appointed a team of forensic accountants from KPMG to investigate the company's finances. Richard Parry, LU's managing director, said: “If Tube Lines believed in December they needed £5.8 billion, how can they turn round now and say they can deliver the same work for less? We have to be assured there's not some nasty surprise waiting round the corner.”
The Mayor admitted at TfL's last board meeting that work on the Piccadilly line could be under threat. He asked Lord Adonis for extra funds to bridge the gap but was told that TfL's budget, which has grown under Labour, was big enough.
Mr Bolt stood by his decision, saying: “I am giving LU a further opportunity either to confirm that it is able to meet the full costs of its requirements or to revise them.”
Furious union bosses said the crisis was another indictment of the complex PPP structure put in place by Gordon Brown to fund a 30-year upgrade. Ken Livingstonetried in two High Court attempts to prevent PPP going ahead.
Bob Crow, RMT union leader, demanded the “immediate sacking” of Tube Lines for its “well documented failures” with the contracts taken back into the public sector.
Baroness Valentine of business group London First admitted the ruling was “difficult medicine to swallow” but urged the Mayor to bring the “acrimonious negotiation” to a close and deliver the Tube upgrade.
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Reader views (18)
Boris is delusional, Bolt has already said that there is no evidence that London Underground is any cheaper than Tube Lines. If Tube Lines were to go into administration because of unrealistic pricing it would be a disaster for London's transport network and for tax payers as London Underground would not deliver at a cheaper cost or anymore efficiently than Tube Lines. There is no blank cheque Boris, the arbiter is setting the costs, that's the whole point of this process.
- Greg, Lewisham
- Greg, Lewisham
For some-one who has to travel on the cattle trucks every working day, I want to know when the fares are going to reflect the service that we receive
- Phillip Stones, London
- Phillip Stones, London
Yep, some Londoners have a short memory.
PPP was introduced by the Labour government at the dissaproval of Ken Livingstone.
- Simon, London
PPP was introduced by the Labour government at the dissaproval of Ken Livingstone.
- Simon, London
If the drivers and station workers were paid a realistic wage then there would be more money to fund the improvements. As a passenger who pays more and more for less and less each year this is tiresome. We seem to have plenty of money to support benefit scroungers, asylum seekers and the like, but to improve the infrastructure of the city that is a primary source of funding there is always a problem.
- Dave, purley, UK
- Dave, purley, UK
Where did the money - our money - that was spent on the ludicrous PPP go?
We have been mugged.
- Dan, London
We have been mugged.
- Dan, London
Bring back Ken,Boris has failed at every turn.What has happend to the 20% TAX increase on public transport,or has that gone to fund Boris and his pals trip to the World Cup in South Africa.Another year of Boris and London will remain a third world with regards to public transport.
- Dave, london
- Dave, london
If Thatcher had never of got ride of the LCC in the first place non of these problems would be around today, if are looking for someone to blame go beck to the beginning of the problem. 80's.
- Fred, London
- Fred, London
I demand the "immediate sacking" of Bob Crow, for his "well documented failures" of striking over safety when it's really been about cash and not having any tea making facilities.
- Anthony, Esher, Surrey
- Anthony, Esher, Surrey
Good to hear Boris outspoken views. However, TfL need to be consistent, given that Bechtel have subsequently been awarded a key management contract on CrossRail.
If Boris is right and it is "looting" by Tubelines, then why go and award them another multi-billion pound contract?
- Jim, London
If Boris is right and it is "looting" by Tubelines, then why go and award them another multi-billion pound contract?
- Jim, London
Louis: "He should tell us how much he's spent so far on legal costs in support of this most recent whim and how much more he's prepared to spend of London's money serving his ego."
this is purely delusional. in what way is contesting the amount of money TubeLines was asking for, serving his own ego? conserving the city's money is precisely what I demand of my mayor.
even Ken never had such a tenuous grasp on reality.
- Scotty, london
this is purely delusional. in what way is contesting the amount of money TubeLines was asking for, serving his own ego? conserving the city's money is precisely what I demand of my mayor.
even Ken never had such a tenuous grasp on reality.
- Scotty, london
""In other countries this would be called looting, here it is called the PPP.""
and who was responsible for PPP? hmmm...
- Scotty, london
and who was responsible for PPP? hmmm...
- Scotty, london
Boris is spot on about the PPP and the way private contractors are allowed to run riot with public contracts. If you and I hired a tradesman we wouldn't dream of giving them the sort of terms the public sector gives these companies. The results are things like the tube PPP and the NHS IT system where billions go down the toilet in return for the shoddiest work.
- Kevin T, Beckenham, Kent
- Kevin T, Beckenham, Kent
It's good to see that Boris is not blaming Ken for this mess. The blame lies fairly and squarely at Gordo Broon's door who wanted PPP so that he could fiddle the books.
Goodness knows what the true debt of this country is as a result of other PPP projects. All of them set up by the "Dear Leader". If he gets re-elected that debt will remain hidden from us the taxpayer.
- Mark H, London England
Goodness knows what the true debt of this country is as a result of other PPP projects. All of them set up by the "Dear Leader". If he gets re-elected that debt will remain hidden from us the taxpayer.
- Mark H, London England
The Piccadilly, Northern and Bakerloo lines were built from scratch (using junk bonds by the Chicago con artist Charles Yckes) for just a fraction of what Tube Lines is getting paid -- even taking into account the devaluation (about 40 times) in the pound since 1900!! For all the work that has supposedly been done on these lines, I do not see one visible sign of improvement. Why isn't this whole Gordon Brown PPP (Private Public Partnership) boondoggle simply cancelled? The only improvement has been to the bank accounts of Tube Lines and its lawyers, at British taxpayers' expense. A massive make-work project that is producing nothing.
- Phil Jones, London EU
- Phil Jones, London EU
So, Boris cuts Ken's £25 CO2 charge, which Ken had ring fenced the profits for funding tube improvements (including air con), was left with a funding black hole and has now thrown his toys out of the pram. Well done London, we reap what we sow! Hope you all enjoy those cattle truck carraiges, it's because you voted Boris!
- Elliot, wandsworth
- Elliot, wandsworth
If you want to blame anybdy blame the clown in charge on the country. Brown agreed to the PPF simply to keep BILLIONS of pounds OFF the books. The true scale of debt will only be revealed when the new Government takes over and it wont be nice so brace yourself. Be prepared for a big shock!
- Duncan Walker, Ex Peckham Now Thailand
- Duncan Walker, Ex Peckham Now Thailand
Typical flip-flop leadership from Boris who was keen on the Arbiter after his original decision. He should tell us how much he's spent so far on legal costs in support of this most recent whim and how much more he's prepared to spend of London's money serving his ego. The only body that TfL looks good in comparison with is the LTA, though at least they change balls.
- Louis Parperis, London, England
- Louis Parperis, London, England
- Helen, West London