Financial Chaos Coming on London Tube

The nearly £2 billion gap between Tube Lines’ £7.2 billion costs estimate and the maximum £5.5 billion the PPP arbiter says it should get raises fears for planned Tube upgrades.

The Tube Lines estimate is a massive £3.1 billion higher – £2.5 billion taking inflation into account – than that of London Underground, which called for the arbiter’s early guidance.

“Metronet’s collapse was so spectacular that it made Tube Lines look good in comparison, but RMT has maintained from the start that the PPP itself is the complex, wasteful problem,” RMT general secretary Bob Crow said today.

“After Metronet’s collapse left the public with a £2 billion extra bill, the alarm bells should be ringing and it is important to understand that 95 % of Tube Lines’ colossal liabilities are also underwritten by the public purse.”

Subsidy for the Tube has increased 20-fold as a result of the PPP, and Tube Lines has been taking more than £1 million a week in profits for its shareholders. Now they are asking for £2 billion more than the arbiter thinks their costs should be. They’re picking our pockets!

“The PPP, like all PFI projects, is a complex scam designed to convert public money into private profit, and these contracts should be brought in-house now,” Bob Crow continued.

Meanwhile chaos looms in preparation for the London Olympics

We are now less than four years away from the 2012 Olympics, and if we are to get the Tube network the capital needs in place by then, the time to sort out this mess is now.

There is no agreement with London Underground staff to run the network round the clock during the 2012 Olympics, the Tube’s biggest union said today.

Following the mayor’s public announcement that the network would operate 24 hours a day during the 2012 games, RMT reveals that it has yet to be approached by the mayor, Transport for London or London Underground Ltd management for discussions on the many complex issues involved.

“It is all very well the mayor announcing that the Tube will run-around the clock during the Olympics, but if it is going to happen it will need detailed planning and the agreement and goodwill of the professional staff who will deliver it,” RMT general secretary Bob Crow said.

“RMT supports the 2012 Olympics and for two years we have been seeking an early settlement that takes account of the substantial additional burdens and responsibilities that London’s transport workers will have placed upon them.

“We are not opposed to 24-hour running during the games in principle, but simply announcing it will not make it happen, and so far there has not been a word from the new mayor seeking even preliminary talks.”

Mayor Boris is clearly out of his depth in all this. Here’s more evidence.

Passengers to pay

Inflation-busting fare increases are a short-sighted fix that will create more problems than they solve, London Underground’s biggest union says today.

As the mayor of London announced increases at one per cent ahead of inflation, RMT called for an end to the colossal waste of public money still being poured into private pockets under the part-privatisation of the Tube’s infrastructure

“If the mayor needs extra cash for the London transport network he should be looking at ways to end the shocking waste still caused by the PPP, not squeezing passengers even more with inflation-busting fares hikes,” RMT general secretary Bob Crow said today.

“The economy and the environment need a massive increase in affordable transport capacity, and that applies to London as much as the rest of Britain,” Bob Crow said.

This article first appeared on Socialist Appeal.

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This post was written by Rick Grogan