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Kiley on Tube PPP : 'unsafe, uneconomic and a contractual nightmare'

Cover story : Bob Kiley

It's almost a year since London's transport commissioner Bob Kiley took up his post after moving to Britain from the United States. Last week, Nina Lovelace spoke to him about his achievements so far, and his strong opposition to the government's £13bn privately financed upgrade of the London Underground.

Bob Kiley's office in central London has a fantastic view of the city.

From his office window, the London Eye, Westminster Abbey and the Thames are resplendent in the winter sunset. But just as the buildings are the city's organs, the roads, railways and the river are its veins, and these are what transport commissioner Kiley is chiefly responsible for.

When he took over as transport commissioner for London, in January, Kiley immediately became responsible for 5% of London's roads, bus and cycle routes and the Thames. His department Transport for London (TfL) is also due to inherit London's ageing Underground system from the government, although this will not happen until contracts for the 30-year, £13bn public private partnership (PPP) to upgrade the Tube have been signed.

Kiley was initially concerned about the plans when he took up the post. A closer look rendered him horrified. He famously branded the scheme 'fatally flawed' on the grounds that it would compromise safety. His fears stem from the fact that the government wants to allow London Underground to retain control of train operations, but hand over responsibility for upgrading and maintaining track and stations to privately financed consortia.

With Mayor Ken Livingstone, he took the government to court to prevent the PPP but they lost and contracts for the PPP are expected to be signed next month.

More recently, Kiley has started to pressurise the Strategic Rail Authority (SRA) to hand over commuter rail lines feeding into London to give TfL the chance to tie all of its transport modes into a unified network.

Once again, he has been rebuffed (News last week).

Kiley says: 'It's a source of continuing frustration - 'oh yes you've been devolved, oh yes you are in charge - except for the Tube, except for commuter rail, maybe not even congestion charging'.'

But Kiley is stubborn and well equipped to be wrapped up in a political and idealistic battle. As an ex-CIA agent and long-serving transportation heavyweight, he is used to confrontation.

Kiley says he fell into the transport sector in 1975 by accident. He was deputy mayor of Boston and 'given' transport by his state governor in 1975 as the job nobody else wanted to do. He cut his teeth on a major overhaul of the city's underground network, the success of which led him to be recruited in 1983 for a similar overhaul of the New York subway.

After leaving the New York Mass Transit Authority in 1990, Kiley moved into consultancy work for five years before spending another five at business lobbying group New York City Partnerships. One day, he received a telephone call from PriceWaterhouseCoopers, which was seeking a reference for a job applicant at newlyformed TfL.

Kiley grew curious about TfL when it became clear the organisation was recruiting before appointing a transport commissioner. One thing led to another and he soon found himself in a video conference with Livingstone who was interviewing him for the top TfL job. A week later, he met Livingstone for the first time in London.

Kiley is quick to point out that attacking PPP was not at the top of his agenda. 'I knew it was an issue, ' he says. 'I was rather curious as it sounded rather inane to me even then.'

It is almost a year since Kiley took up his position and, aside from his battles with central government, he has delivered some real improvements to the city.

Crossrail is moving towards construction and bus services have improved. The number of users has increased by 6% - a good increase considering daily bus journeys number 4M. He has also earmarked another £100M for bus route improvements next year.

It could be argued that greater improvement could have been delivered if Kiley had not been spending so much time and money - £2M - on fighting the Tube PPP. The potential of the Thames, for example, remains underdeveloped, and little progress is evident for cyclists.

'Nobody is happy about spending the money (on the PPP court case), ' says Kiley, 'but the first priority here has to be tending to the basics'.

Improving cycling provision and exploring the river are smaller issues in the current pool of priorities, adds Kiley.

'Every one of the major modes - Tube, rail, buses and roads - are in a state of disrepair. There has to be a full scale attack on these modes. And I think a lot of people see that what we're saying makes sense.'

Kiley's main concern with the PPP is that it will be dangerous and uneconomic.

'The fundamental flaw is the fact that train operations are being completely separated from the maintenance of the trains, as well as the environment in which the trains move, ' he says.

'You're separating the wheels from the track - then you divide the separated maintenance and renewal into three parts, with little provision for co-ordination between those three units - leaving it up to the contract manager or arbiter to make sure that it all comes together. I think it's dangerous, unsafe and will surely be uneconomic.'

Kiley is not opposed to using private finance and has included it in his plans for London Underground. It is rather the contractual headaches he believes the PPP will cause private sector and TfL alike. 'It doesn't exist anywhere else in the known rapid transport world, ' says Kiley.

Kiley does not especially oppose the PPP's performance based-regime which insists that overall frequency or cleanliness of trains and stations are improved by a percentage by a given time. But he thinks that the LU devised regime, which is based on working out whether performance criteria have been met by using algebraic equations, will be a nightmare.

He looks incredulous as he says: 'The idea is that you would be using equations to measure ambience - measuring piles of dirt or chewing gum on the floor.'

But despite these complaints, Kiley's biggest fear is that, by accepting PPP, he will be leaving himself with no way of removing the private companies should they not hit their targets. 'You can penalise them, but you cannot get rid of them, ' he says.

'There is no provision for termination. They could be out robbing banks and molesting children - you could put them in jail - but there is no provision for termination.'

Replacing underperforming contractors is theoretically possible after reviews at 7.5, 15 and 22.5 years, but Kiley is unconvinced that this will happen in practice.

'It's not even clear if you can get rid of them at review time, ' says Kiley. 'At year 7.5 they are absolved of all future need to raise finance if they are unable to do so.' This could mean that the taxpayer would potentially have to support the Tube upgrade for a further 22.5 years.

Kiley also feels that the PPP structure gives himself and Livingstone responsibility for the Tube without the power to influence the private consortia chosen to upgrade it. 'Who's the head of Metronet? Who's the head of Tubelines? These are never going to be household names, ' he says of the bidding private companies. 'But everyone will know who Ken Livingstone is. Everyone will know who Bob Kiley is - because we're the ones who will be hung out to dry if this doesn't work right. That's real risk.'

Kiley is tight-lipped about his plans if the PPP does go ahead; 'That's a bridge to be crossed if it presents itself - but I am far from certain that it will, ' he says. He adds that preparations for the handover of the Tube to TfL after PPP contracts are signed are being hampered by TfL not knowing what it is preparing for.

'Until you know what it is you have on your hands, it's very difficult to recruit people. And almost everyone I've talked to has little interest in this 30-year experiment.'

Kiley says he will not personally make life difficult for the private companies should the PPP go ahead, as the contract itself will do that for him. 'The contractors are going to rue the day that they signed up to this 135- volume, 3,000page, 2M word set of algebraic equations. It's Alice in Wonderland.

They're not going to be comfortable in that environment.'

He looks across at his window. 'But we'll have to do the responsible thing for the city.'

INFOPLUS For more on the Tube PPP go to www.nceplus.co.uk/magazine

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