Money down the Tubes

Don't you just hate it when Ken Livingstone's right? Hizzoner was vehemently opposed to the so-called "part privatisation" of the London Underground all along. That may just have reflected his intellectual biases, but there were a lot of people who shared his sense that allowing private sector firms to manage the maintenance and refurbishment of the Tube might be either expensive or a failure.

It's turning out to be both. Today's Guardian reports that the cost overruns on the two contracts awarded to the so-called "Metronet" consortium could reach £2 billion. Metronet's banks are threatening to pull the plug, and the engineering companies that own the consortium are unwilling to put in more money, so it looks like Transport for London (TfL, aka the taxpayer) will either have to pony up more cash, or scale back the work.

There must be something I don't understand here. Everyone knows that the Treasury (G. Brown, prop.) forced public sector agencies like TfL to use "public-private partnerships" primarily to keep debt off the Government's balance sheet. But there was supposed to be another element: private sector management was supposed to keep costs down and deliver projects on time, with the private investors taking on the financial risks if they failed to do so. What's happened at Metronet is that the project is being delivered late or not at all, at hugely inflated costs, and the taxpayer is being asked to shoulder the burden of what looks like an abject failure.

I recall that when the Metronet partners were asked how long it would take for travellers to "notice the difference" once the consortium took over, they responded "about six months". They said that the first stage would be a "deep cleaning" of the entire system. I don't travel on the Tube as much as I used to, but I can't say I've seen any sign that this was ever done. I also recall that the first dispute between Metronet and TfL after the contract began was over who was responsible for cleaning up graffiti. I'm sorry -- what exactly were you talking about during all those months of negotiations?

It's disheartening but not surprising to find that Metronet is using the age-old excuse that the cost overruns are a result of TfL "changing the contract specifications" -- if there ever were any. It may take until the end of the year for this to get sorted out. I dare say it will take even longer than that for Gordon Brown to admit that the whole public-private thing has been an expensive scam.