What has Metronet achieved lately asks Tube Lines chief

What would be the point of Transport for London (TfL) taking Tube Lines back in hand when there is a lack of evidence that Metronet has become more efficient in the two years since it was reabsorbed by London Underground?

That’s the poser from Terry Morgan who is stepping down as chief executive of Tube Lines at the end of May to take up the position of chairman of Crossrail.

Dean Finch will succeed Morgan as Tube Lines' chief executive.

Metronet collapsed two years ago as a result of an unsatisfactory operating model. Metronet had two of the three PPP contracts covering the £15bn upgrade to the Underground network. TfL then took Metronet’s former operations in-house.

In an interview with The Financial Times today, Morgan says: “Why does TfL want to put improved performance at risk by putting it back in a model that hasn’t demonstrated any component of success, either historically or in more recent times?

“Metronet has been back in the public sector for two years. What has it done?”

Morgan believes that the comments of senior figures at TfL are sometimes based “on emotion, not fact”.

Tube Lines has the PPP to maintain infrastructure on the Jubilee, Northern and Piccadilly lines.

The stakes are high as Tube Lines and TfL are currently in negotiations over the funding level for the second phase of the 30-year PPP project which runs from July 2010 through to December 2017.

The FT quotes Morgan as saying: “If TfL were to axe Tube Lines it would have to pay back the company’s £1.8bn debt.

“When Metronet Rail, which was to carry out similar work on the rest of the network, collapsed in 2007, TfL had to repay 95% of the company’s £2bn debt at short notice.”

Tube Lines is working to a figure of £7.2bn to cover the work the client wants done in the phase starting in July.

LU is running with a lower figure of £4.1bn while an independent arbiter’s take on the value is that it should cost is within the range £5.1bn-£5.5bn.

What is strongly in Tube Lines favour is the surge in efficiency it has achieved since first awarded the contract to cover one third of the entire Underground system.