Metronet contract back in public hands

The former Metronet PPP contracts to upgrade and operate nine Tube lines have been transferred to the public sector, Lord Adonis, the Transport Secretary, confirmed yesterday.

But an independent panel will be set up to oversee the work carried out by Transport for London (TfL), the city's delivery agency

In a written statement to Parliament, Lord Adonis said: "The Mayor and I have accepted the committee’s recommendations that the contracts inherited from Metronet should remain under the direct management of London Underground as the best value option under the present circumstances, with the majority of upgrades already underway."

The future of the contracts has been in doubt since the project collapsed in 2007 and the contracts were taken over by TfL.

Lord Adonis also revealed plans to set up an independent advisory panel to review and evaluate the delivery of the work, and produce annual reports. Boris Johnson, the Mayor of London, and Lord Adonis will choose panel members with experience in engineering, project management and finance.

The original PPP contract, signed in 2003, was supposed to guarantee investment and maintenance work for 30 years. The length and milestones of the new agreement is still unclear.

Work on the Bakerloo Line, which has not yet started, will be decided "nearer the time, reflecting lessons learnt from the earlier upgrades", said Lord Adonis.

The Metronet contracts collapsed in 2007 when the special purpose vehicle (comprising EDF Energy, Thames Water, WS Atkins, Balfour Beatty and Bombardier) filed for administration.

The companies involved each lost £70m, while ministers had to pay off the project’s £1.7bn debt.