After months of work Chris Bolt, the PPP Arbiter, has released his draft report on the dispute between Tube Lines and TfL. It does not make happy reading for Tube Lines.
Mr Bolt has argued that Tube Lines' costs for the seven and a half years from July 2010 should be £4.4billion. Tube Lines have previously argued that they require £6.8billion over this same period. London Underground's position was that they should not have to pay more than £4billion for the works - Mr Bolt was clearly persuaded by their thinking.
Perhaps most damning of all is the following ruling by Mr Bolt:
The Arbiter also found that Tube Lines, working in partnership with LU, could have completed the upgrade of the Jubilee line on time and to budget and that Tube Lines' pursuit of more access, or closures, in the future was unnecessary.
Where this leaves Tube Lines is uncertain. Their Chief Executive, Dean Finch, has already announced his departure. There are now three options open to it:
- Somehow Tube Lines - co-owned by US project management firm Bechtel and UK company Amey - must wrestle their costs down to the Arbiter's proposed £4.4billion level.
- The company may apply - as suggested by Christian Wolmar - for a judicial review of the Arbiter's ruling.
- They hand back their Tube contract, effectively putting the maintenance and upgrade of the entire network back into TfL's hands.
None are particularly palatable options for the company.
Meanwhile, the Mayor is arguing that the Government should pay for any spending over the £4billion set aside by London Underground for Tube maintenance already as it was they who forced the PPP system on Londoners:
I welcome the arbiter's rejection of Tube Lines' view of costs, and his recognition that they should be much closer to London Underground's. However, I am determined that any additional costs must not fall on London's farepayers and taxpayers.
Given the deficit, it is hard to imagine Government writing the Mayor a blank cheque. The only certainty now is that Londoners face further delays and fare rises as this dispute rumbles on.