This content requires the Adobe Flash Player.
Get Flash
09 Mar 2010 10:07
PPP Arbiter increases final settlement to roundly £4.5 billion
- Arbiter recognises that public borrowing is by far the cheapest way to raise additional funds
- Sea-change required in how London Underground and Tube Lines work together to ensure future success
Tube Lines received the PPP Arbiter’s final decision on the scope and cost of work it must deliver over the second review period of the PPP Contract (from mid 2010-2017). The company acknowledges that the Arbiter, Chris Bolt, has increased the final settlement from roundly £4.4 to £4.5 billion but has only partially reflected the detailed representations made by Tube Lines, supported by independent evidence.
Tube Lines is pleased that the Arbiter has been minded to instruct Transport for London (TfL) to fully fund the works following advice from independent financial experts as this represents much better value for the public sector
The Arbiter has made some very challenging assumptions in his final statement that will involve substantial changes in the way the contract is operated and managed. It will be essential that it is underpinned with a strong partnership between Tube Lines and London Underground and that both parties embrace the parameters of the agreement.
The findings are extremely complex and Tube Lines will be carrying out a full assessment to better understand the basis of the judgement and its implications, but remains fully committed to the contract.
Tube Lines Acting Chief Executive, Andrew Cleaves, said:
“We note the Arbiter’s decision on the second Review Period costs. We consider that this decision could present Tube Lines with a significant challenge in its efforts to deliver the investment in the Tube that the system continues to require.
“We have worked hard with London Underground to make this partnership work. During the last seven years, Tube Lines has achieved significant improvements in reliability, cost and safety. With the support of London Underground, we can do even better in the next few years.
“The Tube requires sustained, high levels of long term investment. It is important therefore that there is general support for this massive improvement in the Tube in order to deliver the London Underground’s vision of a world-class railway for London.
“The Arbiter has previously agreed that we have already shown a real commitment to drive down costs and increase performance outputs for the benefit of passengers. Our costs for doing the same work as London Underground are a third cheaper and, according to the Arbiter’s own data, will continue to be less expensive in the future.
“It is clear that the Arbiter has relied on international benchmarking to help drive down public spending and is expecting both us and London Underground to become more efficient still by adopting some of the delivery methods used by other, more modern Metro systems around the world. This will require a step change in the way that Tube Lines and London Underground work together. We will wholeheartedly welcome working more closely with LU to simplify and modernise working practices on the Underground and give Tube passengers more, for less.”
Among the key performance improvements Tube Lines will be required to deliver over the course of the second review period include the:
- upgrade of roundly 81km of track
- renewal/refurbishment of 115 sets of points and crossings
- refurbishment of 38 stations and maintenance a further 62
- completion of the upgrade of the Northern line to increase capacity by 20% and reduce journey times by 18%
- completion of the upgrade of the Piccadilly line to increase capacity by 28% and reduce journey times by 22%
- provision of a new fleet of trains to the Piccadilly line
- maintenance of stations, track, fleet, signals, lift & escalators, civil infrastructure to build on the performance improvements already achieved in the first review period (2003-2010)
Notes to Editors:
Tube Lines’ delivery over the first review period of the PPP Contract (2003-2010)
Improving day-to-day performance of the lines
- From the start of the contract in 2003, there are now 57% fewer delays to passenger journeys as a result of improvements made by Tube Lines:
- The Piccadilly line is 70% more reliable
- The Northern line is 65% more reliable and is now routinely more reliable that all other lines on the entire network
- The Jubilee line is 17% more reliable
Delivering major upgrade work
- All Tube Lines projects have been delivered on or ahead of time, apart from the one exception of the Jubilee Line upgrade:
- The Jubilee Line has benefited from 17% extra capacity, due to an extra car on each train, which was delivered ahead of schedule
- 83 Tube Lines stations have been upgraded, including some of our biggest – Waterloo, Euston, Camden Town – all on time
- Eight stations have been made step free – all on time
- We have replaced or refurbished over 100km of track – all on time
- We have carried out over 140 escalator interventions, 50 of which were major refurbishments – all on time
- We have completed a number of other flagship projects, such as the enlargement of Wembley Park, assistance with the Piccadilly line extension to T5 – all on time
Delivering work cost effectively
- Data compiled by the PPP Arbiter shows that Tube Lines is a third cheaper and more efficient than both LU today and Metronet before it:
- His data shows that Tube Lines is 20-50% cheaper across the board when compared with Metronet, which has been managed by London Underground (LU) now for two years
- Maintenance costs are on average 22% less for Tube Lines stations than stations managed by LU
- For track, Tube Lines’ costs are 55% below the average spent by LU on maintaining tracks on its lines
Boosting safety for employers and contractors
- People working on Tube Lines’ work sites are now over 20 times safer than in 2003, which has a significant impact on cost:
- Employees and contractors working on Tube Lines’ sites are now over 20 times less likely to have an injury than they were when Tube Lines assumed responsibility for its three lines, when the lost time injury frequency rate (LTIFR) was 1.40. The LTIFR is now 0.08.
- The industry measure for staff safety (Lost Time Injury Frequency Rate) shows that Tube Lines is six times safer than LU/Metronet.
For more information contact:
1. Tube Lines is responsible for the maintenance and upgrade of the infrastructure on the Jubilee, Northern and Piccadilly lines. London Underground is responsible for operating the Underground, for employing drivers and station staff, for ticketing and fares, and for the Tube’s safety regime.
2. The Tube Lines consortium consists of two shareholders – Amey and Bechtel. They bring together some of the most experienced providers of business services with specialist skills in the rail industry, including track and signal renewals, plus project and operational management. They are providing some of the best project and operational managers from around the world to work on the modernisation of the Tube system. Amey owns two-thirds of Tube Lines’ business and Bechtel one third.