LONDON TRANSPORT Commissioner Bob Kiley is preparing to take the government to the European Court over its plans to part privatise the Tube, NCE has learnt.
Kiley is poised to go to Brussels to prove that the £16bn Public Private Partnership (PPP) plans to upgrade the Tube have become anti-competitive because of changes to the proposed contracts over the past year.
Kiley, who will become responsible for the Tube once the contracts are signed, told NCE this week that the plans were originally supposed to remove construction risk from the tax payer by passing maintenance and renewal works from London Underground (LUL) to private contractors over a 30 year period.
But negotiations between the preferred bidders Metronet and Tubelines and the government have meant risks to the private sector have now 'all but disappeared' said Kiley.
This reduced risk may have made some companies more willing to tender if they had known how much the risks would eventually be slashed, he added.
Kiley said that a typical example of how risks had changed was that originally contractors would have had to pay up to £200M potential maintenance and renewal cost overruns in the first seven and a half years of the contracts.
The overruns could happen if contractors found out more maintenance work is needed than originally budgeted for.
However, Kiley said that in the latest version of the contracts, the £200M had been slashed to £50M. This means contractors are only responsible for £7M a year potential overruns before Transport for London - thus the tax payer - has to start paying.