Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Supplementary Memorandum by the Royal Borough of Kensington and Chelsea (LU 09A)


  This supplementary memorandum is submitted to the sub-committee, with additional information concerning a major information campaign recently started by London Underground relating to investment in the system. It relates to most of the terms of reference of the inquiry by the Transport Sub-Committee into London Underground.

  The Council is concerned that in the past two or three weeks London Underground appear to have embarked on a major information campaign to put across various aspects of the PPP proposals (without anywhere referring to the PPP by name), including the rationale for the approach, the various benefits of the proposals, and reassurances about safety and ownership (that control of the Underground will stay in public hands). We are aware that the campaign has included information packs to key decision makers, with leaflets, a "mouse mat", newspaper adverts, posters and radio.

  The concerns about the campaign relate to the question of what is its purpose, and to the accuracy of a number of the statements that are being put across, in particular that London Underground have secured the money to carry out a renewal programme spending £13 billion over the next 15 years.

  Commenting more specifically on each of the six posters produced by London Underground:—


  There is no reference to the PPP in this poster, which replaces the previous "Publicly Run, Privately Built" slogan from an earlier poster. "Shadow" running of the PPP structure over the past one and a half years has coincided with a further deterioration of the system and provides no reassurance about the partnership being promoted.


  The implication is that £13 billion has been secured for improvements over the next 15 years which is not the case. The Government has agreed to underwrite the PPP if it goes ahead, at £750 million per year for the next seven and a half years, but the PPP still has to pass the value for money test for contracts to be signed. At no time have the "infracos" ever had to commit themselves to a capital investment plan.


  The message being put across is that the Underground is not being privatised (again there is no reference to the PPP); yet the reality is that its entire fixed infrastructure is effectively being transferred to the private sector on long leases.


  The report by Parsons Brinckershoff on the Underground's Code of Standards concluded that it was "inappropriate and inadequate" to serve as an effective management control mechanism to protect the public interest in performance based PPP contracts with privately owned "Infracos".

  There is concern that whilst TfL would be responsible for safety, it would be up to the "Infracos" to decide how to do the work, so long as it is safe. Furthermore if, during the contract, TfL perceives a weakness in safety, which is not a legal requirement of the PPP agreement, the scope for legal problems is huge.


  In the Council's view the whole process for setting up the PPP and possible delays to the PPP procurement process as a result of the collapse of Railtrack, have added significantly to delays in improving the Underground. The PPP contracts were originally intended to have been signed in April 2000 (just before the election for Mayor for London), but are now not likely to be signed until April 2002, if at all. Furthermore, during the period of the "shadow running" of the "Infracos" over the past 18 months, the performance of the system seems to have deteriorated significantly, adding to the Council's concerns about the ability of the PPP to deliver service improvements.


  Less congestion is one of the supposed benefits of the PPP, yet neither London Underground nor the Government has ever defined how and when improvements will be achieved. The "Infracos" are not required to itemise the improvements they will undertake. Furthermore, the Council is concerned that a number of major Underground improvements that it would like to see would be outside the PPP remit and so would have to be funded separately. Given the high cost of the PPP such funding could well be difficult to secure, delaying much needed improvements such as congestion relief at High Street Kensington Station.

Bill Mount

Transportation and Road Safety Group

Transportation and Highways Department

30 October 2001

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