CONTRACTORS INVOLVED in the pounds7bn privately financed upgrade of the Tube system will receive escalating payments as they increase the number of train paths, according to proposals set out by London Underground.
They could also face financial penalties if trains are delayed by faulty infrastructure, with maximum penalties imposed during rush hour.
Details of LU's proposed payment structure for the upgrade are set out in a consultation document sent to prospective contractors. So far more than 100 contractors, banks and law firms have expressed interest.
The document says that the new Greater London Authority's transport arm Transport for London will oversee the Tube upgrade via its wholly owned subsidiary Opsco. Contracts will then be awarded to one or more contractors or Infracos.
The document acknowledges contractors will be unable to provide blanket guarantees of train journey times as this is a risk they would share with Opsco.
'In practice journey time ... will depend on the performance of both Infracos and Opsco. A method of attributing responsibility for certain events will therefore be required,' says the document.
It goes on to stress that LU is still undecided whether to award the upgrade to a single contractor or whether to split it into two or three concessions.
Having more than one Infraco would create incentives for competition, increase potential for benchmarking, and encourage the development of different infrastructure management techniques. The document adds: 'Having more than one Infraco should increase the options available and reduce the difficulties created if there were problems with performance under any one contract.'
LU also suggests that station refurbishment work could be awarded under separate concessions, while infrastructure work could be bundled into 'groups of lines'.