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

Memorandum by Linc Consortium (LU 15)

  1.  I was asked to be Chairman of Linc with effect from February 2000 on the introduction of Lord McNally. He was aware of my previous role as Chairman of the Policy Committee at the Corporation of London and before that as Planning Chairman and felt that Linc could do with someone with a City background but with London-wide involvements. I am Senior Partner of Solicitors Maxwell Batley and I sit on the Boards of British Land plc and UBS Warburg Limited. I hold an MBA from City University and have Honorary Degrees from them as well as London Business School, South Bank University and the RIBA.

  2.  I signed a Confidentiality Agreement with regard to the commercial aspects of the Linc bid but believe that that no longer applies since both contracts that Linc bid for went to competing consortia. On the other hand, I was not privy at any stage to the figures that were under discussion with LUL Management. This was because my role was to be ready to run the Board from the moment that the infraco came under our management when one of the bids became successful. I did not chair the consortium negotiation meetings but kept in touch with the "political" aspects throughout the 18 months of my involvement.

  3.  Having read the Invitation to Tender, I was aware of the general shape of the likely contract for the BCV line, which was the first group that Linc bid for. I was also aware that LUL's examination of the state of the infrastructure had been taken as given and only a comparatively small amount of due diligence was carried out on the tunnels, tracks, trains etc. There where stages at which the ITT was modified at the request of LUL, eg graffiti cleaning was to be built into the pricing for 30 years. As a result of these modifications my understanding was that during the summer of 2000 the aggregate price for the required works was rising rather than falling.

  4.  Around Christmas 2000 indicative prices would have been in the possession of LUL for all of the contracts, including early estimates for the Sub-Surface Lines. My understanding is that HM Treasury regarded the aggregate as being unacceptably high and the message was passed to all bidders to either remove or delay defined elements of the works so as to bring the aggregate price down or push expensive work into later years. I believe the bidders complied with this approach even though it would have resulted in delayed improvements to the infrastructure and a much flatter profile of work coupled with a lower quality of improvements.

  5.  At about the same time Mr Kiley became involved as Commissioner for TFL with a mission to undermine the principles and operation of PPP. What face to face meetings took place with his team generally amounted to a one-sided redefinition of the works combined with a greatly increased power of intervention on the part of TFL. Severe doubts were cast on whether the modified bids (intended to meet these criteria) could raise the required bank finance to enable the PPP to go ahead. I indicated this to the press.

  6.  Mr Kiley's appointment as Chairman of LUL was greeted with incredulity on the part of the bidders because of the conflict of duty between having to comply with the statutory requirements to implement the PPP and his political stance on behalf of TFL which was to destroy it. It therefore came as no surprise that the rest of the LUL Board threatened to resign unless Mr Kiley was removed as Chairman and this duly occurred following the June 2001 election.

  7.  On 15 September 2001 Linc were advised that they were again number two in the bidding, were given reserved bidder status but in effect the team has been disbanded and the only work currently being undertaken is concerned with securing their entitlement to part of their costs being reimbursed under the arrangements for unsuccessful bidders.

Michael John Cassidy, Chairman

15 October 2001

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