Tube Lines says it cannot meet December deadline
 

As widely predicted, the Jubilee upgrade won't be finished this year,
but at least the funding gap is now much smaller:

From
www.guardian.co.uk/business/2009/sep/23/london-underground-upgrade-delayed

London Underground contractor will not meet target for Jubilee line
upgrade
• Tube Lines says it cannot meet December deadline
• London Underground demands investigation into costs

Dan Milmo, Transport correspondent

Tube Lines says it cannot meet its December deadline for the upgrade of
London Underground's Jubilee Line. Photograph: Garry Weaser/The Guardian

The troubled public-private partnership (PPP) programme to revamp the
London Underground network has been dealt a blow after Tube Lines, its
last remaining contractor, admitted that it will miss the deadline for
upgrading one of the system's busiest routes.

Tube Lines conceded that the Jubilee line upgrade will miss its December
target as LU requested an independent assessment of a multibillion-pound
funding dispute with the company. The call for an investigation came
despite evidence that Tube Lines' costs are lower than those of its
public sector client.

However, Tube Lines faces a blow to its credibility and bottom line
after revealing that a programme to deliver faster and more frequent
trains on the Jubilee line will not be delivered on time.

"We don't think we will quite get there in December," said Dean Finch,
chief executive of Tube Lines.

The delay will cost the company, which is co-owned by Bechtel, the US
engineering group, and Amey, a UK support services group, about £10m a
month in compensation to LU and extra expenditure.

Tube Lines hopes install a new signalling system on the Jubilee line by
January and claimed that LU had refused requests for line closures.

"We got roundly half the closures that we needed. As a result you become
a lot more inefficient and you do not get as much productivity," said
Finch.

LU's acting managing director, Richard Parry, warned that the completion
date could stretch beyond January as LU awaits a revised timetable for
the line. "I am not at all surprised by this. We need Tube Lines to
admit what it is actually capable of doing and just come clean," he
said.

Finch also acknowledged that Tube Lines' future could be under threat as
a dispute over the bill for the next phase of maintenance work rumbles
on.

In 2007 LU took over the largest PPP contractor, Metronet, after the
company ran up a projected overspend of about £2bn. Doing the same to
Tube Lines would come at a heavy cost to the taxpayer because it would
require LU to find £2bn to pay off the company's debt, amid serious
funding pressures at the organisation's parent, Transport for London.

"Tube Lines should go on existing because it is accountable. We will pay
the price for that lateness. It is not the taxpayer who pays for that,
it is us," said Finch.

Parry said the delays over the Jubilee line called into question the
need for a PPP contractor. "The moment the delivery comes into question
then everything about the PPP comes into question."

LU yesterday requested an independent investigation from the PPP
contract referee, Chris Bolt, despite inching closer to an agreement
over the cost of the 2010-17 work programme.

Tube Lines's latest offer, submitted last week, budgets the work at
£4.2bn – substantially lower than its initial bid of £7.2bn. The offer
leaves a gap of £400m between Tube Lines and LU, according to Tube
Lines.

Bolt will now draw up his own estimate of what the work should cost,
leaving LU with the option of accepting his verdict or scaling back the
Tube Lines work programme on its three lines – the Jubilee, Northern and
Piccadilly.

Parry warned that cost comparisons between Tube Lines and LU's upgrade
work, which it took over from Metronet, were "utterly flawed" because
they did not measure the productivity and value for money of each
organisation.