Taxpayers 'face £1.4bn Tube bill'

TfL and Tube Lines have until 2010 to agree maintenance costs

Taxpayers may have to cover a £1.4bn funding shortfall for improvements to London Underground, Transport for London (TfL) has said.

It will cost Tube Lines about £5.5bn to improve the Jubilee, Piccadilly and Northern lines by 2017, the public private partnership (PPP) arbiter said.

The sum is £1.4bn more than predicted by TfL, which said the government, not passengers, should meet the shortfall.

Tube Lines said it believed it continued to provide value for money.

'Extraordinary circumstance'

TfL and private firm Tube Lines have until summer 2010 to agree the cost of line maintenance work, which is due to continue until 2017.

Based on information supplied by TfL and Tube Lines, the arbiter estimated that the work would cost £5.5bn.

This figure exceeds TfL's prediction of £4.1bn but is less than Tube Lines estimate of £7.2bn, which includes a £1.2bn bill for labour and raw material costs.

A TfL spokesman said: "Given this extraordinary circumstance, TfL expects such a shortfall to be met by the government, which imposed the PPP structure on the Tube and Londoners."

He said a number of extra costs were included in the arbiter's estimate "without any explanation".

Once more it is clear that the risk involved in the PPP is being borne by the public RMT union

A Tube Lines spokeswoman said the figures were based on their current "best estimates" and that more accurate figures would become available.

"We continue to believe that we are providing value for money in the work we are currently delivering," she said.

"There remain some areas where we would like further discussion, principally on issues that are outside our control such as inflation and risk."

Last year private Tube maintenance firm Metronet went into administration after an estimated £2bn overspend.

A total of £1.7bn of taxpayers' money was used to pay back the amount lenders made available to the failed company.

A spokesman for the Rail, Maritime and Transport Union (RMT) called for the "wasteful and inefficient" PPP scheme to be scrapped.

"Once more it is clear that the risk involved in the PPP is being borne by the public, not by those who have been draining huge sums in public money out of the industry as profits," he said.