Last month I was the first to report on TfL’s and Boris Johnson’s desire to get rid of the Underground PPP and its one remaining contractor, Tube Lines. Now the Guardian’s Dan Milmo has been receiving some of the same information, extracting an admission from Tube Lines’ departing chief executive, Dean Finch, that the company’s survival chances are “extremely challenging.”
Tube Lines hasn’t given up yet. It actually applied under the Freedom of Information Act for the amounts it was costing TfL to upgrade the Victoria Line, in an effort to prove that its own upgrades are quicker and more cost-effective than TfL’s. I’ve been given some counter-figures by TfL, who claim that they are the more efficient ones.
If a relationship descends to this kind of level there is no future in it, and the sands must now be running out for Tube Lines. The fact that Mr Finch preferred the chief executive’s job at National Express – another privatised transport calamity, now losing all its rail franchises – to staying put tells you all you need to know about Tube Lines’ prospects.
If Boris can end Tube Lines, not only will he save the taxpayer a fortune, but no-one will ever again be able to claim that he has accomplished nothing important. The PPP is still, I think, the greatest single domestic scandal of Labour’s time. Even had it worked properly, it would have delivered very modest improvements, at a very high cost, over a very long period. But of course it has failed even in that; Tube Lines’ flagship project, the Jubilee upgrade, is running almost a year late with no end yet in sight.
Even if the taxpayer has done badly from the deal, Tube Lines has had an extremely profitable seven years. Its shareholders made an equity investment of just £135 million (2 per cent of the total invested in the PPP – the rest comes, in one form or another, from us). In return, those shareholders have already collected “success payments,” dividends, inflated “secondment fees” and (in due course) straightforward profits totalling well north of £500 million. The public, meanwhile, has seen little more than a lot of new wall tiles at stations.
This contract was supposed to last until 2033, but nobody would be surprised if Tube Lines decided to take the money and run.