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Livingstone under pressure to drop legal threat over Tube

LONDON MAYOR Ken Livingstone was this week under mounting pressure to abandon his threat of a final legal challenge to the £16bn privately financed London Underground upgrade.

The Tubelines consortium of Amey, Jarvis and Halcrow-Bechtel said it was hoping to sign contracts for the Jubilee Northern and Piccadilly lines on 7 December, ahead of the threatened challenge.

Contractors and transport officials are rushing to complete the deal because they fear Livingstone could delay it with an appeal against a recent European Commission ruling in favour of the project They believe the project is more likely to go ahead if at least one of the Tube contracts is signed before Livingstone can appeal.

The Commission ruled in October that the payment mechanism to contractors did not include elements of illegal state aid.

However, Livingstone can appeal against this once the full text of the ruling is published.

This is not expected until January.

Tubelines' decision to press ahead is seen as an attempt to face down Livingstone's opposition to the deal once and for all.

Signing this deal is likely to pave the way for completion of Metronet's contracts for the sub surface lines and for the Bakerloo, Central and Victoria Lines early next year.

Metronet's members are Seeboard, Balfour Beatty, Atkins, Thames Water and Bombardier If Livingstone won his appeal against the Commission, the Tube contractors could have payments considered to be state aid stripped from the revenue they earn for operating and upgrading the Tube's infrastructure.

This fear has been holding contractors back from signing their contracts. But NCE understands that Tubelines has decided that Livingstone is unlikely win an appeal, after carrying out a risk assessment of his potential case. He has also lost two expensive and high profile legal challenges to the project already.

It is also thought that the government could offer assurances to Tubelines and its banks so that if Livingstone appealed and was successful, they would not lose out financially.

A DfT spokeswoman said this week that it was working hard to ensure that the project would not be delayed even if Livingstone does appeal. 'We appreciate that no-one wants any more delays to the project, so we won't let that happen, ' she said.

Livingstone strongly indicated last weekend that he 'was minded to appeal' against the Commission's ruling, although the basis for his case is unknown.

An appeal by Livingstone to the European Court of First Instance could take a year to be heard. The case could also be referred to the European Court of Justice, putting the project back by another two years.

Metronet, is also expected to finalise its contract negotiations shortly, but it is not expected to sign final contracts until February.

INFOPLUS www. tube

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