London Underground

The London Underground is an electric railway public transport network (a metro or subway system) that runs both above and below ground throughout the Greater London area. It is usually referred to by Londoners as either simply "the Underground" , or (more familiarly, due to the shape of its deep-bore tunnels) as "the Tube". It is the oldest and biggest such underground system in the world. Operations began on 10 January 1863 on the Metropolitan Railway; most of the initial route is now part of the Hammersmith & City Line.

Public-Private Partnership

Since January 2003, the London Underground has been operated as a Public-Private Partnership (PPP), where all the infrastructure is maintained by private companies but the Underground is still owned and operated by Transport for London (TfL). The network was split into three parts—JNP (Jubilee, Northern and Piccadilly Lines), BCV (Bakerloo, Central and Victoria Lines) and SSL (the sub-surface lines—District, Metropolitan, East London, Circle and Hammersmith & City Lines). The BCV and SSL contracts were won by Metronet, while JNP was won by Tube Lines. These companies are known as Infracos—Infrastructure Companies—and are made up of consortia of different companies: Metronet, for example, is a consortium of Balfour Beatty, WS Atkins, Bombardier, EDF Energy and RWE Thames Water.

Related Topics:
Public-Private Partnership - Transport for London - Metronet - Tube Lines - Balfour Beatty - WS Atkins - Bombardier - EDF - RWE - Thames Water

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Creation

The Mayor of London, Ken Livingstone, was sceptical about the practicality of the PPP plan, and brought in the American Bob Kiley to repeat his success with the New York City Subway using public bond finance. Taking office in 2000 as London's first directly elected Mayor, it was difficult for Livingstone to block the PPP process, which was entirely in the national Government's hands as it still owned London Transport. Livingstone mounted a legal challenge, but eventually dropped it as it was unlikely to succeed, and Metronet and Tube Lines began operations in January 2003. It was later revealed that the legal challenge had cost £4.2m directly, as well as £36m reimbursed to the bidders for costs incurred because of the six-month delay. http://www.guardian.co.uk/business/story/0,,1460243,00.html

Related Topics:
Mayor of London - Ken Livingstone - Bob Kiley - New York City Subway - 2000 - 2003 - £

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In March 2005 the House of Commons Public Accounts Committee, charged with ensuring value for money in public spending, published a report http://www.publications.parliament.uk/pa/cm200405/cmselect/cmpubacc/446/446.pdf concluding that this remained to be demonstrated, primarily because of the untested structure of the 30-year contracts. These are to be revised every 7.5 years, meaning that the ultimate price for the promised £15.7bn of investment is still unknown. It notes that using public bond finance would have saved £90m a year in financing costs, even though the Government guaranteed repayment of 95% of costs in the event of premature termination, and the contracts place limits and exemptions on financial risk transferred to the infrastructure companies. The system still receives an annual public subsidy of £1bn, but its spending is now determined entirely by the infracos' interpretation of their 2000-page PPP contracts. And although the private operators are expected to receive 18–20% returns on capital, for the type of risk associated with major upgrades, most of the work is low-risk maintenance and replacement. The public sector procurement option (using private companies for specific major projects) would also have saved the £455m cost of concluding the PPP contracts, not to mention the five years' delay the contract negotiations caused.

Related Topics:
2005 - House of Commons - Public Accounts Committee

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Planned investment

The UK government has promised £16 billion of funding over the years until 2030, with early priorities to cut delays and improve reliability including refurbishments of lifts and escalators, more thorough cleaning and a new station serving the new Wembley Stadium. The Victoria Line will receive new signalling systems and seven new trains, along with renewal of track and equipment on many other lines. The Jubilee Line will receive £160 million for new signalling equipment and new trains, bringing the total to 63 seven-car sets built by Alstom, although they will not be built in the UK. The Victoria and sub-surface lines will receive 1,738 new cars between 2008 and 2015, to be built in Derby. The Bakerloo Line will not receive new trains until 2019. The Metropolitan, District, Circle and Hammersmith & City Lines will receive 190 new trains, built by Bombardier, meaning all sub-surface trains will be of the same design giving easier maintenance. The trains will feature inter-car gangways enhancing passenger safety, and improved acceleration and braking allowing an increase in train frequency, in the case of the Victoria Line from 28 trains per hour to 33. The last trains to be replaced, 75 District Line trains, will get interim refurbishments.

Related Topics:
Wembley Stadium - Alstom - Derby

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Westinghouse Rail Systems Ltd. will continue to supply signalling equipment; already 75% of installed control equipment has been supplied by Westinghouse.

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Performance

In April 2005, Bob Kiley pressed for an urgent review of the PPP, describing its performance as "bordering on disaster". A week later the chief executive of Metronet was sacked, after complaints that it had made £50m profit http://www.guardian.co.uk/uk_news/story/0,,1418922,00.html despite being behind on all its major works. By April 2005 it had started work on only 13 station refurbishments (instead of 32 as scheduled), and was more than a year behind on the refurbishment of 78 District Line trains. It was also behind on its track replacement programme, having completed 28 km instead of the anticipated 48 km. TfL commented in April 2005 that new equipment promised by Metronet had failed to materialise—"We were supposed to be getting private sector expertise and technology with the PPP (Public Private Partnership) but instead they are just using the same old kit." A TfL spokesman said that Tube Lines was performing much better than Metronet because it had competitively tendered contracts for its capital programme. Metronet, by contrast, had handed the work to its shareholders. {{ref|times140405}}

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In March 2005, the House of Commons Transport Select Committee noted that "Availability is the most important factor for Tube travellers. All the infracos needed to do to meet their availability benchmarks was to perform only a little worse than in the past. On most lines, they did not even manage that." http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtran/94/94.pdf

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Metronet was also declared at fault by an accident investigators' report http://www.metronetrail.com/webfiles/General/White_City_Derailment_Final_Report.pdf into a May 2004 derailment at White City, for failing to implement sufficient safety checks despite being ordered to do so by TfL.http://www.guardian.co.uk/uk_news/story/0,,1286880,00.html

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