Report: Give PPP Arbiter more powers on London Underground

26 March 2010

The Government must give the PPP Arbiter stronger powers to collect information on the works undertaken across the entire underground network and to deliver greater transparency and accountability to taxpayers and passengers, says the Transport Select Committee

Launching a report providing an update on the London Underground and the public-private partnership, the Committee Chair, Louise Ellman MP, said:

"Two years ago, this Committee called for the PPP Arbiter to be given extra powers so that he could report on the efficiency of London Underground’s work on the former Metronet lines. We are disappointed that the Government has not acted on our recommendation.

"We reiterate our recommendation in the strongest possible terms. Since London Underground has cut out many of the inefficiencies inherited from the failed operator Metronet, it should have nothing to hide from greater transparency and accountability."

During its inquiry into the current state of the PPP, the Committee looked at the record of Tube Lines - the remaining private company involved in the PPP - and at the record of London Underground (which in 2008 took over the management of lines formerly run by Metronet).

The Transport Committee concludes:

  • a great deal of data is available under the terms of the PPP about how well Tube Lines has been performing on the Jubilee, Northern and Piccadilly lines
  • by contrast, far too little data is available about the work of the London Underground, which is now responsible for most of the network
  • Tube Lines has performed poorly over its programme to upgrade the Jubilee line, a vital link for passengers travelling to major entertainment venues in South East and North West London. Despite over 100 weekend closures to permit improvement works to the line, the company admits that the new signalling system will not be completed until October 2010 at the earliest - some ten months after its deadline
  • stoked by the Mayor, relations between Tube Lines and Transport for London (along with its subsidiary London Underground) have become increasingly antagonistic, not helped by repeated claim and counter-claim from each side conducted through the media

Louise Ellman MP adds:

"We stand by our previous conclusions that the PPP is fundamentally flawed. Although the performance of Tube Lines has in some cases been exemplary, its failure to upgrade the Jubilee line on time marred its overall record badly.

"Furthermore, we are concerned that Tube Lines’ practice of seconding staff from its parent companies may tempt Tube Lines to award business to contractors that do not possess the required expertise."

Looking forward, the Committee warns that the current periodic review is a critical moment for the future of the PPP. The Arbiter’s ruling that Tube Lines should be paid £4.65 billion for the work to be undertaken between 2010 and 2017 is £465 million more than TfL had bargained for but over £1 billion less than Tube Lines requested.

The Transport Committee recommends:

  • that the Government should prioritise transparency and accountability to taxpayers and passengers by extending the PPP Arbiter’s powers for the collection of data across the entire underground network - LU managed lines as well as those managed by Tube Lines. This reiterates the Committee’s 2008 recommendation that wherever taxpayers’ money is spent by LU, it must be accounted for in an open and transparent manner
  • Tube Lines must learn key lessons from its poor performance on the Jubilee line upgrade in order to minimise missed deadlines and passenger disruptions during future projects. As part of this, Tube Lines must publish plans for avoiding similar overruns to its projects in the future
  • to avoid squabbling about access in future between TfL and London Underground on the one hand and Tube Lines on the other, the neutral PPP Arbiter should decide all requests for additional line closures. The Department for Transport should revise the PPP agreement to put this change into effect
  • to help companies address performance problems and prepare for periodic reviews, the Arbiter should carry out an annual review of all PPP contracts including those transferred to London Underground

Image: iStockphoto

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