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MPs in Metronet attack

MPs this week urged the government to 'bear the Metronet debacle in mind' when the Tube contractors' shareholders Atkins, Balfour Beatty, Bombardier, EDF Energy and Thames Water next come to bid for public sector contracts.

A Commons Transport select committee report published this week also criticises the PPP contract form as a "flawed model". In particular, it points to the failure of the contract to transfer enough risk to the private sector shareholders.

"The parent companies were effectively able to limit their liability to the £70M they each invested in Metronet at the outset… In the fact of this very limited liability it is difficult to lend any credence to the assertion that the Metronet PPP contracts were effective in transferring risk from the public to the private sector," says the report.

Traditional public sector procurement would probably have led to better performance, it claims.

"The model itself was flawed and probably inferior to traditional public sector management," the report continues.

"We can be more confident in this conclusion now that the potential for inefficiency and failure in the private sector has been so clearly demonstrated… proper public scrutiny and the opportunity of meaningful control is likely to provide superior value for money. Crucially, it also offers protection from catastrophic failure."

In response to claims from Metronet that its problems were partly due to changes in specification from London Underground, the
committee recommended that in future the Tube arbiter report on the effectiveness of London Underground as a client as well as on the modernisation of the Tube network.

The Metronet consortium maintaining and upgrading the Bakerloo, Central, Victoria and sub surface lines went into administration last year after failing to win extra funding to keep it afloat. Transport for London is expected to take over the contract.

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