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Tasks split in Tube privatisation plan

LONDON TRANSPORT has set up an elite three-strong team to push through public private partnership plans for the Underground, it emerged this week.

The team is made up of new chief executive Denis Tunnicliffe, LT human resources director Ann Burfutt, and Martin Callaghan - described as an independent adviser to Tunnicliffe.

It plans to separate the Underground into an operating company, dubbed an Opsco, and either one or three infrastructure companies, known as Infracos which will carry out shadow operations until privatisation.

The Opsco is likely to include train drivers and station staff as well as being responsible for train timetabling. The Infraco or Infracos will maintain and provide infrastructure and rolling stock.

LT plans to split the Underground into shadow Opsco and Infraco operations by March next year ready to bring in the private sector 12 months later.

Managers within LT are understood to have voiced concerns over the tight time scale during an internal meeting with Tunnicliffe. Their views are shared by potential bidders for the Underground.

This week they claimed the process would take 'at least six months longer' than the 91 weeks before the April 2000 deadline for the start of the Underground's 15 year, £7bn upgrade programme.

But Tunnicliffe is understood to have assured staff that the deadline is achievable.

Exactly what proportion of the 16,000 staff will be allocated to each is still under discussion, and the split is likely to be difficult to decide. According to LU sources many staff carry out duties which straddle Opsco and Infraco tasks. These include group station managers who act as landlords for groups of stations.

Current estimates within LT are that the staff will be split 50/50 between the Opsco and Infracos. But industry sources believe a 70/30 split is more likely.

The number of Infracos to be established is also being debated within LT. The Department of the Environment, Transport and the Regions is said to favour creating one to maintain consistency across the whole network.

But the Treasury is understood to favour the creation of three Infracos to promote competition between bidders and achieve better value for money.

Potential bidders said this week that they shared the Treasury's view. One claimed that the size of the contract and £15M to £20M bidding cost for a single Infraco would be prohibitive for most British contractors and the contract would be likely to fall to a foreign firm.

'A single concession would need a contractor the size of Bouygues. To do that in this country you would need to put Amec, Balfour Beatty and Tarmac together,' he said.

So far only Railtrack, Balfour Beatty/ Adtranz and Alstom/Amec/Brown & Root are understood to have expressed interest in bidding. LT hopes to stir up more interest at a meeting with 300 British and overseas engineering and finance companies on 16 July.

Matthew Jones

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