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Tube bidders enraged by changing contract terms

BIDDERS FOR London's £12bn Tube upgrade this week expressed anger and frustration at news that the Government had authorised London Transport commissioner Bob Kylie to change contract terms.

They were thrown into confusion over the future of the Public Private Partnership after deputy prime minister John Prescott announced last week that he was putting Kiley in charge of the project.

'I want to see if the PPP structure can be modified so there is unified management control over the operation, maintenance and renewal of the Underground, ' said Kiley, who has previously opposed the PPP.

Kiley and officials met bidders on Monday but he was unable to clarify how the project would be modified.

The Department of the Environment Transport and the Regions said modifications were likely to result in requests for revised bids.

This is despite the fact that bidders for the two deep tube contracts have already submitted final offers.

Bidders told NCE that they were unsure what 'unified management' meant and of the scope of re-bidding that could follow.

'Unified management control is already provided for in the contract. The three consortia were always going to be managed by London Underground, ' said one bidder.

Another said it expected Kiley to demand a more active role in overseeing how the contracts were carried out following minor modifications, such as shortening the contract review period from seven and a half years to five.

This was thought unlikely to result in the need for a detailed rebid for either of the concessions to run one of three infracos - infrastructure companies set up to manage the Tube upgrade.

'It seems PPP is still very much there, ' said one bidder.

'We still have the three Infracos, and the option of bonds has gone.'

But another bidder said changes could mean a return to a traditional contracting approach.

'I think this means they'll want one organisation that will determine what projects are done where and by whom, leading to a whole myriad of construction deals, ' he said.

He added that the whole process had been 'shambolic'.

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