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Contractors cast doubt on Tube PPP plans

FRESH DOUBTS over the viability of the Government's plan to fund London Underground via a public private partnership were raised by contractors this week.

Amec chief executive Peter Mason insisted 'the jury was still out' over the viability of the project.

He added: 'We are not committed to bidding for the PPP and we will only seriously review the position when we see the bid documents. It is not huge business to set against the size of the risk we would have to take on.'

Amec is part of the Tuberail consortium which also includes Carillion and Brown & Root.

Mason's comments followed a decision by facilities management firm Serco to pull out of the bidding. It is understood that Serco did not feel the Tube PPP would provide good value for its £1bn investment fund, which it set up recently with investment bank Nomura. It is thought to favour bidding for other PFI projects.

Contractors have long feared the potentially huge bidding costs involved in the PPP and have already urged LU to limit the number of prequalified bidders for each of the proposed Tube Infrastructure companies to just two (NCE 25 March).

However, London Transport chief executive Denis Tunnicliffe confirmed earlier this year that LT was looking to generate competition by inviting at least three or four bidders per Infraco.

Railtrack has already been given the first option on the subsurface lines and has taken on Bechtel to project manage the deal. However, some observers now believe that the reluctance by other contractors to get involved makes it even more likely that Bechtel will secure a leading role in the whole of the Tube deal.

Antony Oliver

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