TUBE CONTRACTOR Metronet came in for further criticism this week when a committee of MPs described its poor performance as 'cause for serious concern'.
Metronet has been bombarded with criticism since the st annual review of its performance revealed that it was heading for a £750M overspend in the first seven and a half years of its 30 year PPP contract (NCE 23 November 2006).
Last week the Commons transport select committee said the review's findings gave rise to 'serious concern, given that the government's plans for longer term improvement to the Underground rest almost entirely on the PPP'.
It also said that it did not share transport secretary Douglas Alexander's confidence that 'having performed poorly thus far that Metronet will suddenly find that the contract produces an incentive to improve'.
Alexander told the Committee in November that Metronet's contract enables Transport for London to ensure the contractor improves its performance.
Department for Transport permanent secretary Sir David Rowlands agreed with Alexander describing the nancial penalties faced by Metronet as 'severe'.
He told the committee that Metronet was 'in grave danger of having all of the shareholder funds wiped out and that the shareholders may well have to recapitalise'.
An extraordinary review of Metronet's contract is expected to be carried out this summer.
This will decide how Metronet and London Underground will share the cost of the overspend.