The Long Slow Death of PPP

Articles, LondonUnlockedEditorComment

If you ever wanted to understand the tensions between Tube Lines and London Underground, then look no further than John Bull's excellent article on the recent appearance by their respective Chief Executives, Dean Finch and Richard Parry, in front of the London Assembly's Transport Committee.

The article also contains an excellent quote from Dean Finch on the interrelationship between the two organisations:

"I think there is a full spectrum between excellent collaboration - as is witnessed on the day-to-day operation of the railway, I think it works as well as anywhere I've seen works in my experience - to outright hostility. And I guess that's the way it is.

"Tube Lines and London Underground are both guilty of playing out our disagreements in public which is a waste of both our times."

All of which is most certainly true. The question, however, is how the two organisations can work together (if that is both their aims) in the future. The Mayor doesn't quite come out and say it, but it's clear that his opinion is that in the long term, they shouldn't (my emphasis):

"It is time to bring an end to this demented system. I don't have some Trotskyite ambition to take back the track. Whatever happens, the private sector will do the job — but we cannot allow them to do it on these terms.

"It is time to contrast London Underground's successful management of the Victoria line upgrades with the Jubilee line debacle. We need a system that allows London Underground far more control of why and when closures are really necessary.

"Above all, we need a system that delivers value for the taxpayer. Londoners deserve nothing less."

The Mayor has publicly noted that Tube Lines' co-owners, Bechtel and Ferroval, are due to pick up profits of roughly £400m by 2017 and called on the Government to intervene to instead divert these funds to TfL's similarly sized financial hole. It's unlikely that the Government will do so, but the intimation from the Mayor is clear - Tube Lines should be wound up. Boris knows well that shareholders who receive no profit will see no value in the company continuing to operate in its current form.

All of this makes Shadow Chancellor George Osborne's contribution to the debate all the more interesting. Calling PPP the 'worst of both worlds'', Mr Osborne has called for a new approach to the system which "puts value for taxpayers' money first." Whether co-ordinated with the Mayor's comments or not, his words certainly increase the pressure on Tube Lines and their shareholders in the run up to a General Election.