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Last Updated: Wednesday, 18 July 2007, 15:40 GMT 16:40 UK
Tube maintenance work to continue
Metronet staff at work on London Underground
Metronet took on the controversial PPP deal in 2003
Administrators have secured "hundreds of millions of pounds" to ensure Tube maintenance work can continue after the collapse of maintenance firm Metronet.

This should ensure the safe and reliable running of the underground while a rescue plan for the Tube maintenance operations is put in place.

Alan Bloom from administrators Ernst & Young (E&Y) said they have talked to staff and reassured them about jobs.

Ernst & Young were called in after Metronet failed to fulfil contracts.

E&Y said they have also spoken with contractors and the response has been good.

We did not walk away from this lightly, but the amount of money needed was very significant indeed
Metronet boss Graham Pimlott

Metronet's responsibility had been the maintenance and modernisation of two thirds of London's underground train network, known as the Tube.

E&Y took over the running of the business after Metronet said it was unable to continue trading in the face of a huge cost over-run.

Metronet maintains nine of the 12 Tube lines - Bakerloo, Central, Victoria, Waterloo & City, Circle, District, Metropolitan, Hammersmith & City and East London.

The company's shareholders - engineering firm WS Atkins, Bombardier, Thames Water, EDF and Balfour Beatty - have lost their initial investment of millions of pounds.

METRONET LINES
Bakerloo, Central, Victoria, Waterloo & City, Circle, District, Metropolitan, Hammersmith & City and East London

Administrators would not put an exact figure on the losses the firms had incurred as a result of Metronet's problems, but said the total would be at least 300m.

Lengthy period

Ernst & Young's Mr Bloom warned that it was too early to say how long it would take to put new plan in place.

He was speaking at a press conference in central London after the administrators had taken the unusual step of asking for a first-day order, which allowed them to take control of the company and keep it running.

The fresh cash has been put up by Transport for London (TFL), the transport authority that is responsible for London and which is overseen by the Mayor of London's office.

For me it's about getting the money to finish this
Tim O'Toole, managing director of London Underground

London Underground, which is part of TFL and is responsible of the day-to-day running of the Tube, said that Metronet's 2bn of debts would be serviced and paid on time.

However, London Underground added that it, Metronet and TFL were in ongoing discussions with the government and the Mayor of London's office about the possibility of refinancing the outstanding debts.

Metronet boss Graham Pimlott said that the decision to call in administrators was not an easy one to make.

"We did not walk away from this lightly, but the amount of money needed was very significant indeed," he said.

London Underground said that Metronet's problems meant that there would be some delays to maintenance.

Tim O'Toole, managing director of London Underground, said that: "For me it's about getting the money to finish this."

He added that TFL will renegotiate some contracts where necessary.


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