Metronet Rail has asked London Mayor, Ken Livingstone, to appoint a PPP (public-private partnership) Administrator as it says it is unable to complete its contractual obligations without additional funding.
A PPP Arbitrator denied Metronet”s application for ”551m ($1.12bn) earlier this week, saying it would only advance ”121m. Under the PPP contract, Metronet planned to spend ”17bn on upgrades during a 30-year period, but estimated an overspend of some ”2bn by 2010 for which it needed extra funds.
Metronet released a statement today (18 July) emphasising that safety and operations will not be affected, as PPP Administrator Ernst & Young has been appointed to ensure work continues until transfer to a new operating company is completed.
While Metronet and Ernst & Young are keen to stress that staff will also be unaffected by the administration, as Metronet directors will continue to work alongside the Administrator, a spokeswoman for Ernst & Young told ABTN that ”it was too early to speculate about management in the future.”
Rail Union, RMT general secretary, Bob Crow, suggested changes to staffing could be imminent following a meeting held today with Metronet and the Administrator: ”During today”s meeting the threat to impose 691 managerial redundancies on August 20 was suspended after we threatened to move into dispute.”
Metronet Rail BCV and Metronet Rail SSL are responsible for maintenance and renewal of nine out of 12 London Underground lines: Bakerloo, Central, Victoria and Waterloo & City lines under BCV; Circle, District, Metropolitan, Hammersmith & City and East London under SSL.
Crow claims the only salvation for the Underground is to ”take back the track” from the private sector. ”Network rail has already shown what can be achieved by bringing track maintenance work back in-house,” he said.
”The PPP was supposed to be about the privateers taking the risk and saving public money, but Metronet”s hugely profitable owners are pulling the plug because they failed to mug the public of ”2bn over and above the ”3bn they have already had.”
”Meanwhile we [RMT] will also be pressing both the Mayor and the Transport Secretary to take the necessary steps to bring the contracts back into the public sector and to bring a permanent end to this failed experiment,” he added.