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Government's Green challenge could affect LU spending plans


GREEN TRANSPORT policies, coupled with the capital's continued growth as a business centre, could undermine longterm funding plans to revamp the London Underground (LU) Tube network.

In an interview with NCE, Tube Lines chief executive Terry Morgan said that meeting these new challenges will require new public investment to be found for LU in the future, on top of the existing public private partnership (PPP) deal.

'Environmental considerations were second order when we cut the [PPP] deal, ' said Morgan. 'That is not the case today and certainly won't be the case at periodic review. It is now on the agenda and the public purse will have to pay.' Morgan pointed out that the government's policy of cutting CO 2 emissions by urging commuters to switch from car to public transport had increased the burden on the Tube, particularly at stations. He warned that additional funding was vital to ensure that long-term plans did not get abandoned in favour of solving short-term capacity issues.

'The temptation to substitute one programme of work for another is compelling for some people trying to balance the books, ' Morgan explained.

'But in a life-cycle business you really don't have much choice about taking things out if we are going to achieve the objectives that we set ourselves.' Morgan pointed out that when PPP was signed in 2002, daily passenger volumes on the Underground were about 3M a day. But last year, he said, the number actually exceeded 4M on occasion.

'What isn't in any of the plans is congestion relief at any of the stations, ' he said. 'While we have contracts to modernise, the whole question of capacity wasn't a consideration. I don't think that it was ever forecast that this level of potential growth was going to materialise.' Cooling the tunnels is also a big issue said Morgan. Although LU was investing in an innovative solution to this problem, hotter summers and increased train numbers meant that the challenge would become increasingly diffi ult to meet and also require additional investment.

No extraordinary review for Tube Lines

Tube Lines boss Terry Morgan this week categorically ruled out the prospect of following beleaguered Tube contractor Metronet towards an extraordinary review of its business ahead of the first period review of the PPP in 2010.

Cost overruns on Tube Lines' projects were, he said, nowhere near the £200M shareholder liability level required to trigger such a review and he saw no prospect of this changing.

'I know of absolutely nothing at the moment that would indicate that we are going to call for an extraordinary review.

I couldn't be clearer than that could I?' he said.

'I have no forecast that says I am going to be £200M overspent by the period review.

'On that basis the risk around the business is all about meeting our own internal objectives in terms of what we spend to deliver the outputs.'

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