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Metronet goes into administration

Metronet Rail BCV and Metronet Rail SSL, the companies responsible for the maintenance and renewal of the Bakerloo, Central, Victoria, and Waterloo & City lines (BCV) and Circle, District, Metropolitan, Hammersmith & City and East London lines (SSL), today entered PPP administration.
Metronet's shareholders consist of Atkins, Balfour Beatty, Bombardier, EDF Energy, and Thames Water. Metronet's business has a staff of some 5,000 people. The decision comes after the PPP Arbiter announced on Monday that his draft Interim Direction, as part of an Extraordinary Review process which commenced for Metronet Rail BCV at the end of June, would result in an increase in the Infrastructure Service Charge to be received by that company of just £121M million, beginning in January 2008. Metronet had asked for £551M. Metronet Rail BCV requires additional funding to enable it to carry out its contractual obligations during the period of the Extraordinary Review and this company has now established that it has no access to such further funds and will therefore be unable to carry out its contract.Alan Bloom, Maggie Mills, Roy Bailey and Stephen Harris, partners and directors of Ernst & Young, have been drafted in as appointed PPP administrators. The directors of BCV and SSL will continue in office and will work with the PPP Administrators.Direct third party creditors will be paid their arrears of approved invoices for work done or goods delivered that are outstanding as at the date of appointment, in the normal payment terms. The PPP administrators will be having separate conversations with the shareholder companies and their subsidiaries / affiliates in relation to their arrangements.Going forward, suppliers will be paid for approved invoices at their usual rates and on existing terms and conditions agreed with Metronet for work carried out (or goods delivered) during the PPP Administration.

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