Tube Lines defends £7.2bn Tube PPP funding estimate

Tube Lines has defended its controversial estimate of £7.2bn for the second phase of its London Underground PPP contract.

The consortium faced widespread condemnation last week after PPP Arbiter Chris Bolt revealed Tube Lines' estimated costs alongside his own independent estimate of £5.5bn and London Underground’s estimate of £4.1bn.

A Tube Lines spokeswoman said the "vast majority" of the cost difference lay in the different ways inflation was calculated. "Our estimate was based on different estimates of commercial prices and labour, which are not covered by the index currently used. And LUL did not include any estimate for inflation in its submission."

There were also differences in the way Tube Lines estimated risk and scope of work.

The spokeswoman added: "Most importantly, what this exercise has shown is the disparity between LUL’s budget and what this process costs and that has to be an area of concern."

Observers predict that the shortfall is likely to be met by delaying the £16bn Crossrail scheme.