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Metronet firms face fight for more TfL contracts

TRANSPORT FOR London said this week it would make good its threat to withhold work from Atkins, Balfour Beatty and Bombardier because of their failure to perform for the Metronet Tube upgrade consortium.

It said they would not win work with TfL unless they could prove that they would not be distracted from delivering improvements to the Underground.

'Will they continue to find it hard to win contracts with us?

Yes, they will, ' said TfL commissioner Peter Hendy.

Atkins, Balfour Beatty and Bombardier Transportation along with EDF Energy and RWE Thames Water are Metronet's main shareholders. They also carry out the bulk of Metronet's much criticised upgrade work on the Tube.

Hendy has been an outspoken critic of Metronet. In June he said that he was prepared to publicly blame its shareholders for their failure to perform on Tube projects (NCE 8 June).

His comments this week came after Balfour Beatty secured the long-awaited main works contract for the £1bn East London Line extension in joint venture with Carillion (NCE 12 October).

Hendy said that the contract award was delayed because TfL had sought extra reassurances of Balfour Beatty's capabilities.

'We wanted to make damn sure that giving them [Balfour Beatty] another massive contract wouldn't mean that they fuck up the massive contract they already have any more than they already are doing.' Balfour Beatty said it had won the East London Line contract on merit.

'We had regular contact with Peter Hendy involving proper and appropriate dialogue. We tendered for the East London Line contract in our usual professional and thorough manner and we believe we won the contract on merit, ' it said .

Work on the East London Line is being handled by a different Balfour Beatty division to that working for Metronet.

But Hendy insisted his approach was valid.

'The PPP was designed to get the assets into a good state of repair. If that means asking searching questions about the shareholders in Metronet if they tender for other work then we will do it.

'Ask Atkins, Balfour Beatty or Bombardier if they feel comfortable and they will probably say 'no'. To which I say, good.' Hendy fears that if Metronet continues to underperform, vital government funds for Underground upgrades will be withdrawn. The Tube PPP contracts and funding come up for review in 2009, and the government has the option of withdrawing further funds if it is dissatisfied with progress, 'Our concern is that if they get [the Tube contractors] behind now, it gives the government the excuse not to fund the second seven and a half year period, ' he said.

The 30 year PPP programme is split into seven and a half year chunks. The second period includes several major signalling and track upgrades which will signifi ntly increase capacity on the network.

'If we could scrap the PPP contracts we would but they are 30 year contracts which LU and the private sector consortia have signed up to. Primary legislation would be required and the costs of buying out these contracts would be significant.

Metronet said that it was working hard to deliver to its contract and added that all its major capital programmes aside from station upgrades were on or ahead of programme.

(Read a full interview with Peter Hendy on page 26).

Peter Hendy is delivering the Second Scott Wilson Transport Lecture A Vision for London's Transport System at the ICE on Monday.

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