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How low must the Tube go?
IN the wake of the Metronet fiasco, MP Jeremy Corbyn calls for a publicly run and controlled improvement scheme for London Underground.
JULY 16 was another grim day for the history of London Underground, with the collapse of Metronet, who had been responsible for upgrading a number of Tube lines.
The case for London’s underground needing huge improvements is accepted by everybody. We have the world’s oldest Tube network and years of underinvestment – from the demise of the GLC until now – have cost us dearly, in terms of second rate overcrowded trains, on a grossly overcrowded system.
When first elected Mayor, Ken Livingstone pledged to improve the tube system but was in favour of funding it by either traditional Treasury borrowing, or by the issuing of bonds to Londoners who would thus invest in their own Tube network.
This was bitterly opposed by the Treasury. The case ended up in court and the Treasury was, unfortunately for Londoners, successful.
This victory was despite dire warnings from the House of Commons Transport Committee which said, in February 2002 that it is inevitable that the PPP will lead to significant and expensive disputes over the contracts and between staff and employers. A month later, the same committee concluded that £100m has been invested in developing and assessing the PPP contracts.
After an exhausting four-year process there are considerable vested interests in seeing the deal completed. However, the evidence we have taken to date shows that the basis on which the decision has been taken is flawed.
The Capital Transport Campaign pointed out that passengers and taxpayers have been kept in the dark about the contract and will end up paying the bill. They ominously predicted “the prevailing secrecy means they are effectively being asked to sign a blank cheque while blindfolded”.
In February 2002 Ken Livingstone concluded that “the PPP will saddle the travelling public and council tax payers of London with huge and unquantified liabilities, while replicating the key mistakes of rail privitisation on the Underground.”
Metronet started doing their work having been awarded the contract, and very early on started making demands for even more than the £860m a year they were being paid by Transport for London (TfL), claiming problems of cost overruns.
However, Metronet have made enormous profits during the whole period. Indeed, their combined pre tax profits in 2003/4 were £286m. In the last financial year they were over £90m. They finally lost the plot when their demand for £400m additional funds was rejected.
Ken Livingstone, having been saddled with a contract he didn’t want and having fought tenaciously against it, is now faced with the problem of what to do next.
The London Assembly carried a motion on July 18 saying that Londoners should not be left footing the bill for the collapse of Metronet, and called upon the Mayor to ensure that sustainable business and financial arrangements are put in place to protect Londoners from further PPP failures.
In parliament, I was one of a number of MPs to support a motion tabled just before the House rose: “… with further concern the collapse may leave a debt of billions of pounds which could have to be paid for by the tax and fare payer; notes the success of Network Rail on the mainline railway of bringing maintenance back in house which has resulted in reduced delays and greater control over costs; believes that bringing London Underground maintenance back in house would result in a more economic and efficient Tube; therefore welcomes the Mayor of London’s indications that some of the Metronet’s contracts should be brought back in house and urges the government to support this position.”
London is one of the world’s great cities with a commendable emphasis being placed by the Mayor, the GLA and local authorities on increasing public transport and reducing congestion and pollution.
Metronet, which has already cost the public hundreds of millions of pounds, must be replaced by a publicly run and controlled improvement of our Underground and an end to the culture of privitisation of our public services.
The BBC Journalist, Robert Peston reported recently that Atkins and Balfour Beatty value their investments in Metronet at zero.
There are lessons in this disaster for us all in the way in which private finance is increasingly allowed to dominate planning in health, education and housing.
I want to see a good quality, safe, efficient and affordable underground railway system maintained in our city. That is possible, but not if we allow money to be siphoned off in the way in which Metronet has done so, from the needs of Londoners.
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