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Last Updated: Wednesday, 18 July 2007, 07:52 GMT 08:52 UK
Squeezing big changes from the Tube
Tom Symonds
By Tom Symonds
BBC News, transport correspondent

London was the first city in the world to think of putting its train service underground back in 1863.

Tube trains
Keeping the Tube running is a massive undertaking costing billions

But you cannot rely on a relic of the nineteenth century to keep us moving today.

By the time the government started considering the problem in the late 1990s it was obvious - the Tube needed rebuilding.

Easy to say, almost unimaginably hard to do.

Bustling beneath

After all three million journeys are made on the system every day.

Many of its tunnels are too narrow to stand in, let alone work in, when a train is passing. Stations, tracks, signalling and trains all need attention.

The government had a choice.

It could let London Underground, controlled by Mayor Ken Livingstone, borrow billions of pounds and do the work itself.

Or, bring in the private sector, in a new manifestation of the Public-Private Partnership that was already being used to rebuild schools and hospitals.

Gordon Brown, for it was his pet project, decided on the latter when he was Chancellor.

Gordon Brown, UK Prime Minister
Gordon Brown has been criticised for his decision to create the PPP

The famous tube map was split up into three sets of lines, each with its own contract.

Metronet took control of two of the three - and is now responsible for maintaining and improving the Bakerloo, Central, Victoria, District and Circle, and Metropolitan lines, among others.

Mr Livingstone was furious and even tried to stop the plan in court. But he failed, and has had to spend recent years presiding over a system he entirely disagrees with.

In practice the work - dirty and physical - is done at night, when trains aren't running.

'Extremely confident'

The crucial test of the new private contractors is their ability to get the system open again in the morning - especially after the weekend, when commuting hits a rush-hour peak.

It is a test Metronet failed earlier this week at Victoria as some platforms remained shut following weekend work.

The current row, and problems Metronet has encountered, is about the financial efficiency of the company.

Tube station sign and traveller
London's Tube is set to undergo a massive period of change

Metronet claims its contract with London Underground is not fixed but flexible.

It varies depending on the amount of work, with more money paid if extra work is needed.

Metronet says that is exactly what has happened.

Writing in the company's in-house magazine, its chairman Graham Pimlott said "the condition and even the existence of some assets were unknown".

He also says London Underground has asked Metronet to do more - especially to improve stations.

"I'm extremely confident that we shall be paid a large sum of money," he says.

With Metronet calling in the administrators, Mr Pimlott's confidence seems to have been misplaced.

Cash bank

Metronet has exhausted its supply of cash from its banks, and had asked the independent PPP, Chris Bolt, for an initial increase of 551m from London Underground to cover the extra work.

Mr Bolt, whose job is ensuring public money is well spent, refused and was highly critical of the company.

His draft decision, which triggered Metronet's slide into administration, allowed for only 121m in extra funds, nowhere near enough.

He told BBC News: "If they had been delivering properly they would have had cash in the bank, not these debts."

The problem for Metronet is that the other PPP company, Tubelines, appears to be making ends meet.

Some experts believe the difference between the two is down to the way they operate.

Tubelines subcontracts to other suppliers the work on tracks, trains and stations.

Metronet is a consortium of suppliers - including Balfour Beatty, Atkins, EDF Energy and Thames Water - and it may be that their costs are simply too high.

Bright future?

So what happens now?

With Metronet in administration at least all involved could consider the future
Tom Symonds

The priority is to keep the Tube running, and maintenance workers at their jobs. Then the administrators would try to pay off the companies creditors.

Metronet's problems may seem familiar, in so much as they are a smaller version of the spectacular collapse into administration of the overground railway company Railtrack.

The difference is that then, it was the government cutting the supply of cash. This time it is the regulator - the official Arbiter.

One sobering fact is that it took two years for Railtrack's replacement, Network Rail, to emerge.

Breathing space

With Metronet in administration at least all involved could consider the future.

The options: should Metronet be split up into more manageable chunks? Or should the contract be re-let?

Should the Arbiter or the government pump in more money? And should the PPP experiment be stopped, at least the Metronet segment of it, with tube maintenance taken back in-house.

That would be a severe embarrassment to the man who dreamt up the whole idea. Because of course, Gordon Brown, is now the Prime Minister.

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