Transport for London buys out Tube Lines shareholders for £310m
Upgrade and maintenance works for the London Underground are set to return to the public sector after Transport for London and the Mayor of London this week agreed a £310m deal to buy the shares of Bechtel and Amey in the Tube Lines consortium.
Under the deal, which will be completed on 30 June 2010, Tube Lines will become a wholly owned subsidiary of Transport for London.
Bechtel and Amey (which is owned by Spanish company Ferrovial) will end their roles as shareholders in Tube Lines under the PPP contract for capital works projects and maintenance programmes for the Jubilee, Northern and Piccadilly lines.
Amey will continue to provide management and maintenance services on the three lines for the next seven and a half years, while Bechtel will remain for an interim period.
TfL insisted that that the agreement would involve no extra financial call on the government, London’s fare payers or taxpayers in relation to the upgrade of the Tube.
It also said it was confident of generating substantial savings, in part because of the greater flexibility it would have to manage the PPP programmes, which will be subject to a review.
The Mayor of London, Boris Johnson, claimed the deal was “excellent news” for London.
He said: “Freed from the perverse pressures of the Byzantine PPP structure, I am confident that London Underground and private contractors are more than capable of delivering the improvements to London’s transport network we need, on time and on budget.
“There is much work ahead of us, but this arrangement provides the greater flexibility we so desperately need to minimise disruption to Londoners and businesses and ensures that this vital work will be delivered in a more cost effective manner.”
London Underground Managing Director Mike Brown said: “This new arrangement will enable us to work even more directly and collaboratively with the management and staff of our private sector partners to deliver these vital improvements to the Tube, and I welcome that.”
The transfer of ownership follows a recent ruling by the PPP Arbiter that the costs of upgrade works for the second review period (mid 2010-2017) should be £4.46bn. Tube Lines had originally asked for £6.8bn, while the Mayor of London and TfL had threatened judicial review of the Arbiter’s calculations.
- Details
Upgrade and maintenance works for the London Underground are set to return to the public sector after Transport for London and the Mayor of London this week agreed a £310m deal to buy the shares of Bechtel and Amey in the Tube Lines consortium.
Under the deal, which will be completed on 30 June 2010, Tube Lines will become a wholly owned subsidiary of Transport for London.
Bechtel and Amey (which is owned by Spanish company Ferrovial) will end their roles as shareholders in Tube Lines under the PPP contract for capital works projects and maintenance programmes for the Jubilee, Northern and Piccadilly lines.
Amey will continue to provide management and maintenance services on the three lines for the next seven and a half years, while Bechtel will remain for an interim period.
TfL insisted that that the agreement would involve no extra financial call on the government, London’s fare payers or taxpayers in relation to the upgrade of the Tube.
It also said it was confident of generating substantial savings, in part because of the greater flexibility it would have to manage the PPP programmes, which will be subject to a review.
The Mayor of London, Boris Johnson, claimed the deal was “excellent news” for London.
He said: “Freed from the perverse pressures of the Byzantine PPP structure, I am confident that London Underground and private contractors are more than capable of delivering the improvements to London’s transport network we need, on time and on budget.
“There is much work ahead of us, but this arrangement provides the greater flexibility we so desperately need to minimise disruption to Londoners and businesses and ensures that this vital work will be delivered in a more cost effective manner.”
London Underground Managing Director Mike Brown said: “This new arrangement will enable us to work even more directly and collaboratively with the management and staff of our private sector partners to deliver these vital improvements to the Tube, and I welcome that.”
The transfer of ownership follows a recent ruling by the PPP Arbiter that the costs of upgrade works for the second review period (mid 2010-2017) should be £4.46bn. Tube Lines had originally asked for £6.8bn, while the Mayor of London and TfL had threatened judicial review of the Arbiter’s calculations.
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