THE GOVERNMENT'S decision to pull the plug on Railtrack will undermine investors' con - fidence in the London Underground public private partnership (PPP), London's transport commissioner Bob Kiley said last week.
Investors will be less willing to finance the plans without the promise of extra returns, said Kiley, speaking at a Royal Academy of Engineers meeting. Londoners will therefore pay more for the same work, he added.
Kiley, a long standing PPP opponent, rejected government claims that factors affecting Railtrack were different to those affecting the Tube.
'The issues are exactly the same in both cases, ' said Kiley.
'Namely, whether profit maximising private companies - with complete authority over rail infrastructure - will make the right decisions about how to maintain and upgrade the system, and whether they will have the financial capacity to raise and invest the necessary funds to implement those decisions.'
Kiley also said that London Underground had compromised the value for money provided by the Tube PPP by choosing preferred bidders several months before final contracts are signed.
He added that preferred bidders should only have been chosen when more of the details of the PPP contracts had been worked out.