Afternoon:
10°c
There is no one I've met so far who believed that the Earth would be engulfed by a black hole shortly after 8.30 yesterday morning.
We have, indeed, survived — and, rather more miraculously, England have won a football match. But a surprising number of people do seem to have fallen for the week's other black-hole scare story, about the London Underground.
There are certainly similarities between that allegedly planet-threatening “Big Bang” experiment in Switzerland and our own dear Tube.
In both cases, things are despatched through long, sub-surface tunnels, at considerable expense to the taxpayer, with no certainty that they will ever reach their destinations.
True, the protons sent around CERN's Large Hadron Collider are travelling at just under the speed of light: not something you could say about the Circle line. But black hole stories are like Edgware trains when you want the High Barnet branch — they just keep coming, one after the other. So on the same day that we were threatened with planetary doom, Londoners were also threatened with Tube doom — a multi-billion-pound “shortfall” in the budget for the PPP upgrades.
To show why this is total baloney, I need to explain what was actually happening. The event which caused the “black hole” headline was a report by the independent arbiter, Chris Bolt, into how much money the remaining PPP contractor, Tube Lines, should charge to fulfil its obligations to its three lines, the Northern, Piccadilly and Jubilee, in the next stage of the PPP contract.
In this stage, or “period”, which runs from 2010 to 2017, Tube Lines is supposed to do two vital things: upgrade the signalling on the Northern line and completely renew the Piccadilly, with new signalling and new trains — as well as continuing its existing programme of station, track and escalator renewal.
TfL reckons all this should cost £4.1 billion. Tube Lines says it should cost £7.2 billion. After several months of research and modelling, the arbiter ruled on Tuesday that a fair price for the work is between £5.1 and £5.6 billion.
In other words, the real story this week is the fact that Tube Lines, the ultimate cowboy builder, wants to charge up to £2.1 billion more than an independent expert reckons the work should actually cost (and £3.1 billion more than TfL says it should cost). This is no “shortfall”, it is a greed and inefficiency premium.
The arbiter review was to some extent a haggling exercise, with Tube Lines probably pitching deliberately high to Mr Bolt and TfL probably pitching deliberately low. But even allowing for the element of artificiality, the arbiter has largely sided with TfL. Seldom before has the ruinous nature of the PPP been exposed so clearly.
And make no mistake, it is Londoners who will be paying. Tube Lines boasts of “spending over £5 billion” in its first seven-and-a-half year “period”. Its chief executive, Terry Morgan (paid around £1 million last year in salary and bonuses, by the way), chirrups: “”Does anyone seriously believe that ... our lines would be able to rely on receiving these levels of investment if they were still in public ownership?”
Well, yes, Terry — because the great majority of the money that Tube Lines is “spending” does, in fact, come from the public. Tube Lines simply charges it to TfL. Almost all the rest is borrowed, under guarantees which mean that if Tube Lines ever defaults, the taxpayer has to pick up 95 per cent of that, too, just as we did with Metronet.
Tube Lines has been held up by a lot of people who should know better as the princess of the PPP, compared with the Metronet turnip. It is better run than Metronet was — that would not be hard — but the truth, as this week's report shows, is that it is all too similar: an unacceptably expensive way to achieve what have been, so far, distinctly modest gains.
Tube Lines brazenly lists its three “flagship achievements” to date — the seventh carriage on Jubilee line trains, the rebuilding of Wembley Park station and the new Terminal 5 extension to the Piccadilly Line — in the full knowledge that none of these things is actually part of the PPP. They are all extras, purchased by TfL separately. (The PPP did promise an extra carriage on the Jubilee, but not until much later in the contract life.)
Tube Lines is also fond of claiming that all its programmes are on budget. Actually, its stations ran £200 million over, and its total proclaimed spend in its first period of “over £5 billion” is half a billion more than it originally said it would spend.
That pattern will almost certainly continue if it gets its way in the second contract period. According to the arbiter's report, TfL thinks that track renewals over the seven years can be done for £364 million; Tube Lines wants £677 million for the same job. TfL thinks that Tube Lines only needs to close lines for 21 million customer hours; Tube Lines wants line closures of 90 million customer hours. In echoes of Metronet, the arbiter also attacks Tube Lines's payments to its shareholders, which he describes as “high” and “potentially outside of market norms.”
Yesterday, with her usual instinct for grasping the wrong end of the stick, Val Shawcross, chair of the London Assembly's transport committee, asked the Mayor to lobby ministers for the money to pay whatever Tube Lines asks. “Tube Lines have generally been doing a good job for London,” she said. “The next phase of their contract isn't for gold-plating the Tube — it's for vital maintenance and improvement works.”
Tube Lines has not been doing a good job; and gold-plating is exactly what it has been doing. Whitehall was quick to make clear that there will be no more money, and that is the right decision. TfL has real black holes, such as the disaster created by Metronet, to worry about.
But if ministers refuse to pay the Tube Lines premium, they are obliged, in all conscience, to offer TfL the only other way out — get rid of Tube Lines, and finally end the costly farce of the PPP.
Reader views (15)
I am an ex employee of Tube Lines, only leaving at the end of last year and have a few things of interest to say.
I worked for nigh on 5 years for TLL with an apparently successful career in the Station upgrade department. If only the London tube payer knew how much money was siphoned into various employee pockets right down to ground level.
Its true the culture was created when the Tube was in the public domain, although the same people transferred over, with their habits. The shoes were not hard to full, and the track record not impressive. The budgets were huge, incredibly forgiving and accountability non-existent.
We once planned a Jubilee line weekend closure for the JNP signal upgrade testing. Little did the public know that indeed we TL did not prepare sufficently and cancelled the work, but not the closure. Yes the line stayed closed the whole weekend (from Wembley to Stanmore) and no work was carried out. Of course if the public and TFL (and London Underground) think the work is being carried out, it would only make sense to pretend it was, and of course pay all involved a few hefty overtime shifts.
I can think of countless night shifts, where work was planned, communication was bad, a few small obtaclesn upset the plan, (like carelessly forgetting to arrange an access number)so its no big deal to send everyone home with a full nights pay, without consequence. Why is there no consequence, because the budgets are huge and can easily absorb these.
- Ex Tube Liner, ChCh NZ, 27/06/2009 02:46
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I think it's a disgrace that any public service should be in the hands of greedy, overpaid animals, recklessly and consistently going over budget and time scales.
Tube Lines is the Metronet tiger that has not changed it's stripes and will never do so with the cash cow of public sector contracts.
I believe ALL public services, i.e. trains, tubes and utility companies should be in the public domain. Even if they are slightly more inefficient than the private sector, they will never be near the same league as these cowboys ripping London and the nation off, for their selfish, phenomenally rich shareholders and execs.
Johnny Boy - TfL has been a huge success - just look at the unusable chaotic buses pre-Ken - with massive investments and new projects for new tube lines. How can the public have a reasonably costing transport system with such enormous private sector overheads? In the end it makes it impossible to bring/keep fares down to enable people out of their under capacity cars and provide a usable system.
Get rid of Tube Lines and PPP and make a public service, transparent and most importantly public again.
- Danny The Dog, London, 15/09/2008 09:36
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Wow Andrew, it wasnt Kens fault?!
- Sean Kirwin, London, 14/09/2008 23:32
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Of course there is no mention of the battle Ken Livingstone fought against the government in opposition to the introduction of PPP. Might he have been right?
- James, London, United Kingdom, 13/09/2008 07:14
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Johnny Boy seems to have forgotten the huge hidden subsidy that motorists get from joe public. The idea that these parasites pay their way by "road tax" and fuel duty is laughable.
- C. Nichol, London, 12/09/2008 09:43
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TfL couldn't manage an ice-cream stand. The Con-Zone costs motorists about £220m per annum and has achieved zero reduction and zero reduction in pollution. The 35% decline in car visits has been filled by an 18% increase in buses and taxis. It just shows public transport achieves zero and bums off the backs of cars in subsidies.
It's such a costly miserable failure even New York looked across the pond and said "you cannot be serious" and rejected it overwhelmingly for NY.
The TfL reports are an object lesson in obfustication and hiding abject failure in fogged language. I'm not the least surprised the hand-outs from motorists pockets to private bus Co's is also concealed. Public transport is a failure and wouldn't work without extortion from private transport to shore up a bankrupt transport system.
I agree with the comments above - TfL shift paper around and pretend to manage but always have the get-out clause to blame others for their continued costly failures. The Commies and Socialists (and safety groups) should be kicked out of transport, the subsidies must end and engineers and private businesses should run what is viable or just let it die a death. Capatalism isn't perfect but its far and away the best system we have.
- Johnny Boy, London, 12/09/2008 00:31
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Private Eye has been exposing the farce of PPP - the 700 page contracts, the massive cost, the armies of consultants. Sly Gordon does it simply to keep the cost of borrowing off the Govt's books, so he can stick to his farcical 'golden rule'. And now the Standard has caught up. Six years later.
- Srs, London, 11/09/2008 22:38
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It should be remembered that governments of both parties neglected to invest in Londons Underground network for decades. Remember the Kings Cross fire which occurred because escalators were still made of wood at the end of the 20th century!
I noticethat Andrew cant admit in his article how "Ken was right" but Andrew has played a part in creating a mayor for London that creates more Black Holes than the scientists at the CERN project can ever dream of!
Remember that while Metronet played pass the parcel with PPP money Tube lines concentrated on getting on with the job in hand and had to watch as the government bailed Metronet out while they delivered upgrades.
- Melvyn Windebank, Canvey Island, Essex, 11/09/2008 21:01
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Despite outward appearances, TfL still have their grubby mitts all over Tube Lines, just as they did with Metronet before they went bang. They just have someone else to blame when it all goes wrong these days. The PP was suuposed to bring in the expertise of some of the biggest and most successful contractors in the UK in order to get things built. In practice, failed managers from LUL still have a very big say in how things are done - the interferance level simply shouldn't be tolerated. These managers failed before PPP and they are failing now, they call it 'managing their contractors' but this is far from the truth. Get rid of the deadwood at TfL/LUL and let London have the transport system it not only deserves, but the one that it NEEDS.
- Ex-Lul/Tfl Employee, Pinner, Middlesex, 11/09/2008 14:53
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Another example of how wrong the privatisation of London transport is is that profits from the congestion charge go to the privatised transport providers, in other words London road users subsidise the profits of the likes of Arriva, First Group etc. Neither company says how much money they receive from the congestion charge, so how can we find out?
- Royston, london, 11/09/2008 14:35
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Take our tube away from these cowboys and place it back with professional civil engineers. Problem solved!
- Joannie, London, England, 11/09/2008 14:22
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hear hear mark london what a brilliant idea
- Mat, london, 11/09/2008 14:19
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...but John, there's no evidence here that the public sector was incompetent. Maintenance on the tube was costing the taxpayer and the traveller a lot less when it was done by the public sector. So what's wrong with the public sector?
- Liz, London, 11/09/2008 13:24
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Why didn't London Underground hire out the Circle Lines tunnels for this 'Bing-Bang' experiment? The scientists could have sent their protons round that line because there are seldom any trains on it...
- Mark, London, 11/09/2008 11:59
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There seems to be no happy medium in this country between public sector incompetence and private sector avarice.
- John, Bangkok, Thailand, 11/09/2008 10:37
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