Mayor of London and Transport for London threaten JR over financing of Tube upgrades
The Mayor of London and Transport for London have said they could be left with “no alternative” but to launch a judicial review action over the PPP Arbiter’s directions to Tube Lines and its shareholders on finance.
Boris Johnson and TfL said the approach taken by the Arbiter, Chris Bolt, in his draft directions of 10 March was equivalent to asking Londoners and taxpayers to “write a blank cheque” and risked “good money going after bad”.
They called on Bolt to direct Tube Lines – which is responsible for the maintenance and renewal of the Jubilee, Northern and Piccadilly lines – and its shareholders, Ferrovial and Bechtel, to seek private finance to plug a PPP funding gap.
The Mayor and TfL claimed Tube Lines is running up to 10 months late in its delivery of the Jubilee Line upgrade and is behind schedule on the upgrade of the Northern Line. This means that Tube Lines needs to find “several hundred million pounds to cover the costs of these delays and massive costs overruns”.
Johnson and TfL expressed concern that funds designed for upgrade works in the PPP Second Period could be used to cover this shortfall. They said the Arbiter need to ensure effective oversight and monitoring of a credible Tube Lines plan.
The Mayor said: “The Arbiter has ruled that the costs should be £4.46bn, thus demonstrating that Tube Lines’ original demand for £6.8bn was simply scandalous. Yet now Tube Lines is not even being required to demonstrate it has a credible plan for delivering at the Arbiter’s price.”
London Underground managing director Mike Brown said: “The Jubilee and Northern line upgrades are seriously delayed and over budget as a result of Tube Lines’ failure to deliver, a fact now confirmed by both the PPP Arbiter and an independent QC earlier this year.
“It is essential that Tube Lines and its shareholders are now called upon to set out in full their plan to deliver the full scope of the works for £4.46bn, fully £1.3bn less than the final cost they claimed.”
In response, Tube Lines pointed out that the Arbiter’s independent financial advisor has said that for Tube Lines to raise additional finance would cost London tax and fare-payers an extra £1.3bn “and therefore it would clearly represent better value for money if TfL find any additional funding themselves.
Tube Lines also accused TfL and London Underground of interfering with due process. Acting chief executive Andrew Cleaves said: “Their call to the Arbiter to instruct Tube Lines to raise the finance gives the appearance of LU and TfL improperly trying to influence the Arbiter’s process.”
Tube Lines acknowledged delays to the Jubilee upgrade but pointed to much longer delays to the Central line upgrade managed by London Underground.
The Arbiter will announce his final decision on 29 April.
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The Mayor of London and Transport for London have said they could be left with “no alternative” but to launch a judicial review action over the PPP Arbiter’s directions to Tube Lines and its shareholders on finance.
Boris Johnson and TfL said the approach taken by the Arbiter, Chris Bolt, in his draft directions of 10 March was equivalent to asking Londoners and taxpayers to “write a blank cheque” and risked “good money going after bad”.
They called on Bolt to direct Tube Lines – which is responsible for the maintenance and renewal of the Jubilee, Northern and Piccadilly lines – and its shareholders, Ferrovial and Bechtel, to seek private finance to plug a PPP funding gap.
The Mayor and TfL claimed Tube Lines is running up to 10 months late in its delivery of the Jubilee Line upgrade and is behind schedule on the upgrade of the Northern Line. This means that Tube Lines needs to find “several hundred million pounds to cover the costs of these delays and massive costs overruns”.
Johnson and TfL expressed concern that funds designed for upgrade works in the PPP Second Period could be used to cover this shortfall. They said the Arbiter need to ensure effective oversight and monitoring of a credible Tube Lines plan.
The Mayor said: “The Arbiter has ruled that the costs should be £4.46bn, thus demonstrating that Tube Lines’ original demand for £6.8bn was simply scandalous. Yet now Tube Lines is not even being required to demonstrate it has a credible plan for delivering at the Arbiter’s price.”
London Underground managing director Mike Brown said: “The Jubilee and Northern line upgrades are seriously delayed and over budget as a result of Tube Lines’ failure to deliver, a fact now confirmed by both the PPP Arbiter and an independent QC earlier this year.
“It is essential that Tube Lines and its shareholders are now called upon to set out in full their plan to deliver the full scope of the works for £4.46bn, fully £1.3bn less than the final cost they claimed.”
In response, Tube Lines pointed out that the Arbiter’s independent financial advisor has said that for Tube Lines to raise additional finance would cost London tax and fare-payers an extra £1.3bn “and therefore it would clearly represent better value for money if TfL find any additional funding themselves.
Tube Lines also accused TfL and London Underground of interfering with due process. Acting chief executive Andrew Cleaves said: “Their call to the Arbiter to instruct Tube Lines to raise the finance gives the appearance of LU and TfL improperly trying to influence the Arbiter’s process.”
Tube Lines acknowledged delays to the Jubilee upgrade but pointed to much longer delays to the Central line upgrade managed by London Underground.
The Arbiter will announce his final decision on 29 April.
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