Reading about Tubeline's apprehension in taking on Metronet's failed Tube PPP contracts one thing seemed remarkable to me. It appears that much of th eprescribed work laid out in the PPP contracts omitted some crucial details. Terry Morgan of Tubelines cites the upgrading of Arsenal station, my nearest station:
"He cites an upgrade at Arsenal station as an example of the complexity of deciding the scope of work. Tube Lines undertook to put "a new cover on the station", but found it could not build on the existing roof. "So we had to strip the existing roof," he said - at Tube Lines' own cost."
It is remarkable that despite £500m of public money spent on drawing up these contracts that 'unforseen' situations like this could occur.
Showing posts with label Tubelines. Show all posts
Showing posts with label Tubelines. Show all posts
Tuesday, July 31, 2007
Thursday, July 19, 2007
Metronet: taypayer pays again
The taxpayer paid £500m for Metronet and Tubelines respective PPP contracts to be set up. Now Metronet are unable to manage their finances properly, the taxpayers pay again. It appears to me that this stems from Metronet's greed in attempting to award all contracts to their constituent companies thereby keeping all money within the cycle. However they couldn't even make this work when they were running it all themselves. So we'll probably have Tubelines running the whole PPP.
Tuesday, July 17, 2007
Metronet going bust
Yesterday's post about the Tube PPP Arbiter's decision not to cave in to Metronet's demands for more Government hand outs attracted attention to this blog from both PPP contractors, Metronet themselves and Tubelines. It is of course interesting to note that Tubelines hasn't faced the same problems as Metronet.
Metronet failed to competitively tender work, preferring to offer it to it's member companies, including Balfour Beatty, WS Atkins and Bombardier. They obviously saw this as a way to make more money at the public expense from themselves by running a closed shop. Tubelines have offered contracts competitively.
More seriously though the public purse looks likely to pick up th ebill from Metronet's chronic failure to deliver. The transfer of risk from public to private sector was one of the strongest arguments made at the time the PPP was being proposed. At the time I thought the cost of drawing up the PPP high. The vast sums, around £500m, spent on lawyers and management consultants to draw up these contracts failed to envisage this. This money could have been invested in the system directly. However, I was happy to see the PPP go through if it was going to deliver real investment into the network at effectively a fixed price to the public purse.
Now it is likely that Transport for London will have to arrange a re-financing package. This isn't how it was meant to work. Something was clearly lost between the Government's argument at the time and what was put into place. I'm sorry to my Dad as I remember saying to him at the time that the PPP was nothing to worry about when clearly this is proving a big waste of time and money.
The National Audit Office's 2003 report into the PPP "London Underground PPP: Were they good deals?" will make for more interesting reading now.
Metronet failed to competitively tender work, preferring to offer it to it's member companies, including Balfour Beatty, WS Atkins and Bombardier. They obviously saw this as a way to make more money at the public expense from themselves by running a closed shop. Tubelines have offered contracts competitively.
More seriously though the public purse looks likely to pick up th ebill from Metronet's chronic failure to deliver. The transfer of risk from public to private sector was one of the strongest arguments made at the time the PPP was being proposed. At the time I thought the cost of drawing up the PPP high. The vast sums, around £500m, spent on lawyers and management consultants to draw up these contracts failed to envisage this. This money could have been invested in the system directly. However, I was happy to see the PPP go through if it was going to deliver real investment into the network at effectively a fixed price to the public purse.
Now it is likely that Transport for London will have to arrange a re-financing package. This isn't how it was meant to work. Something was clearly lost between the Government's argument at the time and what was put into place. I'm sorry to my Dad as I remember saying to him at the time that the PPP was nothing to worry about when clearly this is proving a big waste of time and money.
The National Audit Office's 2003 report into the PPP "London Underground PPP: Were they good deals?" will make for more interesting reading now.
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