Tube upgrades threatened by doubts over funding

The Tube could see major cuts to its upgrade programme after PPP Arbiter Chris Bolt questioned London Underground's (LUL's) ability to pay Tubelines' and Metronet's costs beyond 2010.

Bolt's concerns came to light in his response to LUL's recent request for guidance on the costs Tubelines could incur in the second phase of its Tube upgrade PPP contract. He wrote: "The PPP arbiter is of the view that the infrastructure service charge payable to the three infracos [Tubelines and Metronet BCV and SSL] may exceed the resources currently available to London Underground in the second review period."

LUL played down the arbiter's statement this week. A spokesman said Transport for London (TfL) had "a financial settlement from government to 2017 totalling £39bn". However, TfL declined to specify how much of the £39bn will fund LUL's Tube upgrade programme past 2010.

RMT union official Brian Whitehead warned LUL against cuts to Metronet's workload. Metronet was taken inhouse by LUL after it went into administration last year with almost £2bn of cost overruns on its PPP contract. "LUL must not prop up Tubelines by allowing it to bid for work that could be done in house by Metronet," he said.

He pointed to Tubelines' current bid for a 10-year £90m maintenance contract on the East London Line, as an example. "Metronet did the maintenance on this line before it went into administration," he said.

Tubelines confirmed it is bidding for Tube work outside of its PPP contract, but denied it was in response to possible cuts to its PPP workload. A Tubelines spokeswoman said the consortia had the capacity to take on extra works and was "growing the business".