Page last updated at 13:35 GMT, Monday, 31 March 2008 14:35 UK

Metronet 'to blame' for collapse

Metronet staff at work on London Underground
Metronet went into administration after financial problems

Tube maintenance firm Metronet and its shareholders were "primarily responsible" for the company's collapse, the government has said.

The comments were in response to a report by the House of Commons Transport Committee which was critical of public private partnership (PPP).

The government said there were "clearly lessons to be learnt by all parties" but that PPP itself was not at fault.

Metronet went into administration last July after an estimated 2bn overspend.

'Pretty much useless'

The government also said that the full extent of the maintenance firm's failure would become clear once they reviewed Metronet's financial position when it went into administration last year.

It added the involvement of private companies in the improvement and maintenance of the Tube was "inevitable" but the basic structure of public-private partnerships was not to blame for the firm's collapse.

The comments came after the committee's highly-critical report in January on the structure of PPP on London Underground, which it said had rendered Metronet's contract "pretty much useless".

The taxpayer has been left to pick up a 2 billion tab for Gordon Brown's incompetence when he set up the Metronet PPP
Shadow transport secretary Theresa Villiers

In response, the government said: "The government is fully aware that the involvement of the private sector cannot always guarantee success, nor that they will deliver innovation, efficiency and economy.

"However, there are also examples when the public sector management of major projects, including the Underground in the 1990s, has also been unsuccessful."

Liberal Democrat transport spokesman MP Norman Baker said: "The Metronet debacle shows just how wrong this government's attempts to hide public spending through complex public-private partnership deals can go.

"While the government appears a little more chastened than normal, there is nothing in its response to suggest that ministers have learnt the fundamental lessons to prevent a recurrence of this dreadful fiasco," he added.

Shadow transport secretary Theresa Villiers said: "The taxpayer has been left to pick up a 2 bn tab for Gordon Brown's incompetence when he set up the Metronet PPP.

"Ruth Kelly has admitted that the full cost of Metronet's administration is uncertain. It is also uncertain what price remains to be paid by the taxpayer and the London fare payer."

Metronet costs taxpayers 1.7bn
06 Feb 08 |  London
Q&A: Metronet collapse
17 Sep 07 |  Business

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