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Tube Lines boss frustrated as rival gives PPP a bad name

News

TUBE LINES boss Terry Morgan this week spoke of his frustration at the bad headlines being generated by rival Tube firm Metronet and defended the Public Private Partnership (PPP) deal used to maintain and upgrade the Tube.

'There are so many good things happening and I get more frustrated than anybody by the 'is it going in the right direction?' question, ' said Morgan, speaking to NCE exclusively at Civils 2006.

'There is £4.5bn of investment going in and we had better make sure we can use it efficiently.' Metronet was slated last month by PPP arbiter Chris Bolt, who found the firm to be heading for a £750M overspend in the first seven and a half years of its 30-year contract.

It is also massively behind in station upgrades and track renewal (News 23 November).

Tube Lines by comparison remains broadly on schedule.

Although it is liable for the first £200M of any cost overrun Tube Lines director of projects Ian Copeland, told NCE that as yet it has not had to eat into this. 'We may have run over in a couple of projects but we have made it back in others, ' he said.

Bolt called into question Metronet's decision to award almost all work to its shareholders, in stark contrast to Tube Lines that puts all work out to competitive tender.

Metronet has responded by beginning to contract out some work, but Morgan questioned whether the approach would work for Metronet.

'We have a fundamentally different business model and there are no halfway houses, ' he said.

'We have two shareholders.

Bechtel brings resources in programme management and Amey provides operational support.

We have taken 200 people out of the shareholder community.

This brings a wealth of experience from both companies.

'To be honest we hadn't intended to recruit [so many].

But our view was there was too much risk in the supply chain and they couldn't manage. So we said, 'let's take more risk to better manage'. That is the big difference.' It is understood that this means the organisation has more autonomy and requires less input from London Underground (LU) than Metronet. In his report, arbiter Bolt said that Metronet in part blames LU for its overrun because of slow decision-making and confusing instructions.

Morgan added that there is real value added from open competition. 'I don't mind giving work to a shareholder, but ultimately they are a contractor and I can demand that performance levels are what they committed to achieve, and I have the right to cancel their contract if not.'

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