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Let out clause for Tube PPP contractors

CONTRACTORS ON the 30 year privately funded upgrade of London's Underground could abandon the project after seven and a half years without losing money, Transport for London (TfL) warned last week.

TfL claims that Public Private Partnership (PPP) contract details in its possession show that the contractors or infracos can walk away when the contracts are reviewed after seven and a half years.

Under the PPP the three upgrade contracts are reviewed after this time, giving London Transport the chance to modify them. But an analysis of contract terms published last week by TfL shows that London Transport has inserted a clause allowing the contractors to quit when the review comes up.

'This private sector right to exit from the PPP arrangements can arise even in the first seven and a half years of the contract, if the Infracos' performance falls short of what is required by the contracts and also if the reasonable cost of performing the work exceeds projections by more than £50M in the first seven and a half years, ' says the TfL analysis.

This would allow contractors to leave work incomplete, it warns.

TfL's report was published after London Transport released PPP contract details to it as part of ongoing consultation.

INFOPLUS The full TfL report is available at www. tfl. gov. uk or go to www. thetube. com

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