Written Ministerial Statement for 29 October
2009
TRANSPORT FOR LONDON: NEW CONTRACTING AND
SCRUTINY ARRANGEMENTS
The ex-Metronet investment programme covers
the upgrade, maintenance and renewal of infrastructure on the
Bakerloo, Central, Victoria, Waterloo & City and the Sub-Surface
(Metropolitan, Circle, District, Hammersmith & City) lines.
It will deliver nearly 30% more capacity across the network, improving
journey times and reliability.
Following the administration of Metronet in July
2007, its assets and obligations were transferred to Transport
for London in May 2008 as an interim measure. The former Mayor
and Secretary of State for Transport tasked a Joint Steering Committee
consisting of Transport for London (TfL) including London Underground
Limited (LUL), the Department for Transport and HM Treasury with
considering a range of options for the permanent structure of
the Metronet contracts, with the objective of providing a stable
and safe operational framework and delivering the modernisation,
upgrade and maintenance of the tube infrastructure at an affordable
price that offered Value for Money for the taxpayer.
The Mayor and I have accepted the Committee's
recommendations that the contracts inherited from Metronet should
remain under the direct management of LUL as the best value option
under the present circumstances, with the majority of upgrades
already underway. Some of these contracts have since been renegotiated
to secure more favourable terms for LUL. Future contracts will
be procured directly by LUL, including robust performance incentives
and transferring risk where appropriate. LUL will remain responsible
for all asset management decisions, but there will continue to
be substantial private sector involvement through the contracts
managed by LUL. A decision on the most appropriate contracting
arrangement for the Bakerloo line upgrade (which has not yet started)
will be taken nearer the time, reflecting lessons learnt from
the earlier upgrades.
LUL is investing in its management and organisational
capacity and capability in order to meet this new challenge. Organisational
restructuring within LUL has also created a clearer separation
of client and delivery functions, with a defined sponsor for each
project.
Underpinning these new arrangements and responding
to the increased size of TfL's investment programme are new scrutiny
measures at Transport for London. The Mayor will establish an
independent advisory panel with remit extending across the entirety
of the TfL investment programme, including all maintenance, renewal,
upgrades and major projects across the modes, but not operations.
Members of the new panel will be appointed by
the Mayor from a shortlist agreed with me. The Mayor and I will
also agree the panel's terms of reference. The panel will report
to the TfL Board and the Mayor as its chair. The members of the
panel will have experience in a range of disciplines including
engineering, finance and project management, ensuring that as
a whole the panel will be able to offer expert advice, opinion
and challenge on all aspects of TfL's investment programme, including
the ex-Metronet works.
The panel will be able to review all aspects
of project delivery including cost and programme deliverability.
It will also review delivery of the investment programme at a
portfolio level, including management and organisational capability
and the efficiency, effectiveness and economy of delivery of the
investment programme. The panel will report its findings directly
to the TfL Board, who will also receive a TfL management response
setting out how the issues raised have been or will be dealt with.
The panel will commission other reports as it or the TfL Board
consider appropriate. It will publish an annual report making
overall conclusions on the delivery of the Investment Programme.
Copies of all reports will be provided to me, in view of Government's
significant contribution to the investment programme through the
GLA transport grant which accounts for just under 40% of TfL's
total income.
These new arrangements build on the work of
LUL during the interim period and will offer the stability and
certainty LUL need to deliver the investment programme inherited
from Metronet and with it the improvements so critical to growth
and prosperity in London.
These arrangements are in accordance with the
existing framework of devolution of powers to the Mayor, who now
bears full responsibility for delivery of the upgrade, maintenance
and renewal work previously the responsibility of Metronet.
Tube Lines will remain responsible for the upgrade,
maintenance and renewal of infrastructure on the Jubilee, Northern
and Piccadilly lines under its PPP, with independent scrutiny
provided by the PPP Arbiter.
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