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Who'll pay £1.9bn cost of Metronet collapse, ask MPs
Jason Beattie, Chief Political Correspondent25.01.08
The Government must come clean on how much the botched contract with Metronet to upgrade the Tube will cost taxpayers, MPs said today.
The transport committee said ministers should state who will pick up the £1.9billion bill resulting from the collapse of the private consortium.
In a scathing report, it said the "lamentable state of affairs" had left most of London Underground's upgrade and maintenance work in doubt.
The MPs lambasted the Government for forcing LU into the public-private partnership deal with Metronet, resulting in the company's £2billion over-spend and "spectacular" failure.
They said it raised questions about the supposed benefits of PPP contracts and any future deals with the consortium's partners - Atkins, Balfour Beatty, Thames Water, Bombardier and EDF Energy.
"The public, whether as taxpayers or Tube passengers, must pay for the private sector's inefficiency and failure," said the report. "Any reasonable person would find scant evidence to sustain a dogma that the private sector will always deliver greater efficiency, innovation and value for money than the public sector."
The all-party committee also criticised LU, saying: "A contract which fails to incentivise efficiency in the private sector, and deter poor planning, lack of forethought and gold-plating in the public sector, is pretty much useless.
"We recommend that the Government, as a matter of urgency, makes a full assessment of the additional costs incurred as a result of the failure of Metronet, including the cost of work that has been inefficiently undertaken and the cost of administration."
Then, say the MPs, Transport Secretary Ruth Kelly should tell the Commons what proportion will be met by the Government and what Londoners and Tube passengers will have to pay.
Gwyneth Dunwoody, the Labour MP who chairs the committee, said: "The future of most of London Underground's upgrade and maintenance work is now in doubt. If the Government is ever again tempted by a seemingly good deal from the private sector, it should recall Metronet's pathetic under-delivery and the deficiencies in the contracts that allowed it to happen."
Brian Cooke of London TravelWatch said: "Passengers have already experienced many closures - particularly at weekends - for upgrading. While this is necessary, it will be a catastrophe if the work falls by the wayside."
Liberal Democrat Mayoral candidate Brian Paddick said: "The committee is right to slam Gordon Brown's imposition of the PPP on Transport for London [and] to regret that the review by the independent arbiter was blocked, but wrong to conclude the Government should beware of the private sector.
"London Underground and TfL are part of the problem, not part of the solution. The thought of LU taking over where Metronet failed is a recipe for even more disaster."
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"Who'll pay £1.9bn cost of Metronet collapse?"
Nothern Rock perhaps? It would be a nice way for them to say "Thank you" to the taxpayer...
- Sarah, London
Another Nu Labor disaster. And they just lost £50 billion on Northern Rock.
- Jacqueline, Hampstead, London
