Revealed: Metronet's £144,000 a year labourers

Andrew Gilligan
18.03.08

The astonishing pay rates charged by Metronet for its workers can be revealed today.

Documents leaked to the Evening Standard show that a night track operative, the lowest grade of manual labourer, attracts a minimum rate of £48.10 an hour, or £87,000 a year without overtime.

More skilled labourers, such as signal technicians, cost up to £79.19 an hour, or £144,000 a year, based on a 35-hour week, although not all of this is passed on to the individual employee.

The "charge-out rates" - paid by Transport for London from fares and taxpayer subsidy - were agreed by London Underground in August last year after Metronet went into administration and remain in force. The company continues to carry out much of its track renewal and repair programme under the control of the administrator.

Last week, the Standard revealed police were investigating allegations of corruption involving contracts worth £850,000.

Further documents and whistleblower testimony, obtained as part of a twomonth investigation into Metronet, show a pattern of systematic expense and inefficiency at the company. We can reveal:

• How Metronet's station refurbishment programme was marred by incompetence, failures and chaos.

• One Metronet project team held routine staff meetings during working hours on a hired Thames pleasure boat, complete with a free bar paid for by the Public Private Partnership contract.

• Metronet managers treated themselves, contractors and staff to hospitality at Premiership football matches in London.

• Metronet charged nearly £25,000 to provide two parking spaces at a suburban station.

• London Underground's managing director accused Metronet and other contractors of "plundering" the network.

The current charge-out rates for labour have an enormous impact on costs. Apart from the range of charges for manual workers, there are substantial charges for managers. A programme manager is charged out at up to £124.50 an hour, or £226,000 a year.

A "charge-out rate manual" seen by the Standard shows the rate for programme managers rose by 12.8 per cent last year despite Metronet's collapse, which was due partly to failures of programme management.

Other big management gainers included those in charge of "cost control", who enjoyed rises of up to 27.8 per cent.

Tony Travers of the London School of Economics said: "By the end of next year, £10billion will have been spent on the PPP, overwhelmingly from the public purse, and what the hell can we see for it - a few tiles at stations, a bit of re-railing. It's a terrible catalogue of failure."

A TfL spokesman said: "London Underground is working to reduce charge-out rates. We have made some progress. We will continue to work to get the best possible value for money for London Underground and its customers."

Our investigation also documents, for the first time, the depth of the chaos in Metronet's stations refurbishment programme. A progress inspection report, dated 28 February 2006, on Queensway, Metronet's first deep Tube station to be modernised, found there was "little work being done," a "complete lack of drive" and weekends were being "totally wasted". The inspector found worker behaviour on the project was so poor that nine labourers were kicked off the site for disciplinary reasons on the day he visited.

Metronet gave the two-platform station, one of the simplest on the deep Tube network, four site managers - one each for four different parts of the premises. Queensway was closed for more than a year to allow 24-hour working and trains passed through without stopping.

However, Metronet failed to erect proper barriers on the edge of the platforms, so most work at platform level could not take place when trains were running. When the project was finally finished in June 2006 - six weeks late and after missing two deadlines for reopening - a report found the "completed" station had 346 electrical faults, 214 faulty fixtures and fittings, 125 communications faults and 41 fire alarm faults, a total of 759 faults. The report said there were "gaps in the f loor", "foul sewerage odours" and "exposed electrical cables with conductors showing".

The new CCTV cameras on the platforms were not fitted properly, so they shook every time a train arrived, making the pictures unwatchable.

Despite this, Metronet managers arranged a "celebratory drink and dinner" on 29 June 2006 to "celebrate our success" in a private room at the Lord Raglan, a pub in the City, paid for at the company's expense. Invitations to the event went to 78 people.

The Standard has also learned that during the summer of 2006, routine work meetings of the Bond Street station modernisation team were held on a hired Thames pleasure cruiser with a complimentary bar. The vessel left from Westminster pier at 1pm and sailed up and down the river until the managers had concluded their business, or until it was time to go home. "It was just sheer, naked greed," said one London Underground source. "The contracts gave them the opportunity to screw us and they took it to the maximum."

Metronet and its contractors also organised a number of "golf days" for senior members of London Underground staff. A substantial prize, such as a DVD player, was awarded at each hole for the staff member who hit his or her ball the closest, the source said. The prizes were provided by Metronet and its contractors.

Hundreds of staff were taken to Premiership football matches around London by Metronet contractors, the source said, with various grades of hospitality provided. Footsoldiers would be given match tickets. Supervisors and junior managers would be entertained in hospitality suites. Senior managers would enjoy private boxes.

But documents obtained by the Standard show the results for Tube passengers were often less than satisfactory. In one email, dated 1 June 2007, the general manager of the District line, Bob Thorogood, attacked the "very disappointing" and "unacceptable" modernisation of one of his stations, Putney Bridge. "It seems to me beyond belief in this day and age that we cannot find a contractor who can lay a decent floor surface," he said. "I would not accept such a poor standard of work at my house. Why do my people [staff] have to put up with it at work?"

Metronet's reply, three weeks later, made Mr Thorogood angrier.

He said: "It appears that MRSSL [Metronet] are suggesting the unacceptable condition of the floor surface is because people have been walking on it... We cannot expect it to last for much more than a year... my understanding of the PPP contract is that we have paid for a 30-year job." In another email, Tim O'Toole, managing director of London Underground, said Metronet and other contractors were taking valuable heritage features such as London Transport roundels, station signs and furniture.

In an email dated 10 November 2006, he asked: "How do we prevent the contractors from plundering our stations, by the way?"

TfL said: "Metronet's collapse was a direct result of their failure and their shareholders' failure to properly plan, manage and execute the maintenance and renewal work that was their responsibility.

"Our focus is now on getting Metronet out of administration. Significant progress has been made towards transfer of the two Metronet companies to Transport for London."

A Metronet spokesman said: "Virtually all of these examples pre-date Metronet's entry into PPP administration in July 2007. Metronet is under new management and we are working to improve our delivery."