Britannia Radio

I hate to say it but Ken Livingstone was right over the idiotic way 
Gordon Brown insisted that London Underground should be financed.  He 
stamped his foot and insisted on the now totally discredited Public-
Private Partnership (PPP) system .  This has meant that any profits 
go to the contractors (in this case Tube Lines and earlier Metronet) 
but when the figures don't add up it's the taxpayer that foots the bill.

The Metronet story was extensively reported by me in Jan / April this 
year.  Particularly I suggest "Brown's creation crashes -  We pay 
£20bn" of 7/2/08

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TELEGRAPH Business News  10.9.08
Tube regulator flags up potential £1bn funding gap
By Alistair Osborne

Fresh uncertainties have arisen over the financing of the London 
Underground network after an initial opinion from the Tube regulator 
highlighted a potential funding gap of at least £1bn.

Chris Bolt, the arbiter for the public-private partnership on the 
Tube, yesterday published his preliminary view of the costs required 
to maintain and improve the Jubilee, Northern and Piccadilly lines 
over the seven and a half years from July 2010.

He suggested a range of £5.1bn-£5.5bn - far less than the £7.2bn 
requested by Tube Lines, the company responsible for the three lines, 
but much more than the £4.1bn projected by London Underground.

Mr Bolt's preliminary view points to a funding gap of at least £1bn 
in the budget of Transport for London, the mayor-controlled body 
responsible for the Tube.

Tim O'Toole, London Underground's managing director, said: "Any 
funding required above TfL's budget should be met by continuing 
support by government, which imposed this PPP structure on the Tube 
and Londoners."

The differences between the three parties are partly due to their 
view of inflation, notably in labour and raw materials. Tube Lines 
reckoned this would add £1.2bn to its costs, while Mr Bolt assumed 
£500m. London Underground's £4.1bn figure includes nothing for 
inflation.

Mr Bolt said that ultimately "if London Underground doesn't have the 
funds, it has two options - ask for more money or descope the 
contracts".

Metronet, the other London Underground maintenance company, collapsed 
last year facing a £2bn cost overrun.