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Tube overspend review will cost Metronet millions

TUBE CONTRACTOR Metronet this week warned that an extraordinary review into the £750M 'additional expenditure' spent on its PPP contracts would cost it and London Underground millions of pounds.

'The review would be a long process that would distract from the renewal work, ' warned communication director Paul Emberley. 'Preparing submissions would cost us and London Underground several million pounds, and require a lot of attention.' London Mayor Ken Livingstone has called for an extraordinary review, to be carried out by London Underground PPP arbiter Chris Bolt, to settle how much, if any, of the £750M overspend should be reimbursed to Metronet (see NCE 8 February).

But Metronet wants to try to settle the dispute directly with London Underground and told NCE that if it was unsuccessful in this then the review would only cover seven contracts which account for an undisclosed proportion of the additional costs.

In November, Bolt found that management failings within Metronet had contributed to the overruns, a move that prompted Metronet to revolutionise its procurement systems (NCE 23 November 2006).

Metronet, comprising Atkins, Balfour Beatty, Bombardier, Thames Water and EDF Energy, will now put work out to external competition instead of carrying it all out internally.

PPP arbiter Chris Bolt this week published guidance for the review. He said Metronet would be required to submit 'every detail of every activity' for scrutiny.

In his November review of the fi rst three years of the PPP he criticised Metronet's performance and warned again this week that evidence seen so far 'leads me to conclude that the projected costs are not fully efficient and economic. This is consistent with the view I reached last year that Metronet has not carried out its activities in accordance with good industry practice.'

Where the extra cash was spent

The sub-surface lines track improvement programme

Earls Court Station phase two work

Baker Street Station modernisation

Sub-surface lines rail buckling recovery programme

The Central Line heavy overhaul

Victoria Line upgrade with low loss conductor rail

Victoria Line upgrade enabling works

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