Tube Lines boss warns of 'significant' Metronet pension cost

Any future owner of collapsed Tube infrastructure contractor Metronet would face "significant" extra costs because its staff were allowed to join the London Underground (LUL) final salary pension scheme in May.

Terry Morgan, chief executive of LUL's other infrastructure contractor Tube Lines, made the warning in an interview with the Financial Times today.

The LUL pension scheme was opened to Metronet staff by then London mayor Ken Livingstone, just before the 1 May mayoral election, in a bid to avert strike action.

Morgan said: "We're concerned it has the potential to be a significant unforeseen cost for the Underground at a time when it needs more money to invest in the infrastructure."

The staff had previously belonged to a defined contribution pension scheme.

Morgan added that the reason for Metronet's demise was its decision to retain too many public sector working practices.

In comparision, Tube Lines had transformed the practices it inherited from LUL, he said. "We're delivering track renewal work for 30% less than when we started; delivering station renewals work for 50% less."