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LUL 'as good as private contractors'

LONDON UNDERGROUND can manage its own capital investment programme as efficiently as private sector contractors, managing director Denis Tunnicliffe told MPs last week.

Speaking to the all party transport subcommittee, he said Treasury- imposed borrowing restrictions and short term public spending allocations had made it impossible for LUL to plan capital spending efficiently.

As a result LUL is being forced to develop the privately financed investment programme announced by Deputy Prime Minister John Prescott in March (NCE 26 March).

'If Government allowed London Underground to plan long term we could match private sector efficiency,' he said. 'But I can see no indication that in the future we will see such stability.' He questioned how Government could justify signing 25 year contracts with the private sector when it was reluctant to allow LUL to enter into agreements lasting 25 months.

His robust defence of the engineering skills within the public sector body came after being asked whether LUL backed Deputy Prime Minister John Prescott's plan for public private partnerships to upgrade infrastructure and rolling stock.

Tunnicliffe said LUL's management had never offered a view on the plan but he felt that the solution offered was a 'practical way down the middle' between privatisation and public ownership.

Tunnicliffe favoured the award of a single contract for the upgrade programme. But he accepted that it would be hard to convince the public that a single contract was better value than dividing the system into two or three packages.

However, when pressed on whether London Transport directors had recommended this approach Tunnicliffe declined to comment publicly. 'The Board of London Transport gave its view to the Secretary of State,' he said, adding that it was known that LUL had been looking at privatisation options for many years.

Tunnicliffe also admitted that of the £365M extra cash recently announced by Prescott, LUL planned to spend up to £65M developing the privately financed investment programme. And while LUL will spend around £450M annually over the next two years - described to the committee as 'around the limit of what we can sensibly spend' - it will only spend between £100M and £150M a year reducing the Underground's £1.2bn backlog.

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