Tube Lines sale comes as private rail sector faces bleak future.
The news that maintenance company Tube Lines is to be sold to Transport for London for 310 million [pounds sterling] next month hammered the last nails in the coffin of the public-private partnership (PPP) to upgrade the Tube network. Tube Lines had been charged with maintaining and upgrading the Jubilee, Northern and Piccadilly lines.
Tube Lines had already seen Metronet Rail, the company responsible for the rest of the network, go back under public control, but had hoped that it would stay the course of the PPP where its competitor had failed. The PPP, pushed through by New Labour in the boom years and fiercely opposed by the then Mayor of London Ken Livingstone, has always attracted criticism.
The collapse of the contract comes at a time when the private sector must be questioning the viability of working in partnership with government in the rail sector, following the entry into administration of Jarvis's rail business in March, which was blamed on cutbacks by the quasi-public body Network Rail.
There were more than 1,000 redundancies at Jarvis, and Network Rail has since made further cutbacks to its maintenance staff, much to the chagrin of unions, which claimed that safety will be compromised. It is a sign, along with the PPP debacle, of how cuts in public spending will have an impact on the engineering industry.
Tube Lines lost out on the second phase of the PPP after it became embroiled in a row over funding with London Underground. Each organisation offered wildly different estimates of what the second phase should cost. Contract arbiter Chris Bolt eventually decreed that a figure of 4.46 billion [pounds sterling] was fair. This was far below Tube Lines' own estimate of 5.75 billion [pounds sterling]--but crucially still more than London Underground said it could pay.
Transport for London (TfL) will now have to determine what work it can afford to carry out, and some critical infrastructure projects will be scaled down. Dr Stephen Glaister, a former TfL board member who now works part-time as a non-executive director of Tube Lines, said that "descoping" of works was inevitable.
Glaister has been critical of the PPP in the past but said there were no guarantees that bringing the contract under public control would be of benefit. 'Work would have been descoped under the old regime and it will have to be descoped under the new one" he said.
He said he hoped that TfL would "preserve" the parts of Tube Lines' work that had been successful, such as considerable improvements in train reliability and an outstanding safety record.
But, as the PPP comes to a costly end, many question marks remain over the future of London Underground, and the viability of partnerships between the public and private sectors in the rail industry.
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|Title Annotation:||TRANSPORT FOCUS|
|Publication:||Professional Engineering Magazine|
|Date:||May 19, 2010|
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