Fare-rise row over bus bonanza

A row has broken out over the soaring cost of running London's public transport network.

Ken Livingstone also stands accused of failing to heed warnings over the multi-million-pound subsidies required to run the bus network. Tomorrow, the Mayor is expected to announce which major projects will be axed to cope with a shortfall in funding until the end of the decade.

This is despite his decision last month to raise an extra ?125 million from fares, with bus commuters facing 43 per cent rises and Tube travellers paying aboveinflation increases from January.

The Government is to give an extra ?789 million and will allow the Mayor to borrow ?2.9billion on the money markets. But that will cost ?250million a year in loan charges.

Lynne Featherstone, Liberal Democrat chair of the London Assembly's transport committee, said there was only enough money for extensions of the East London line and Docklands Light Railway and smaller bus schemes around Stratford.

She said: "The rest of the capital will be crippled with ever increasing loan interest payments. Many of London's outer suburbs are very poorly served by public transport."

Bob Neill, Conservative leader on the Assembly, said: "The Mayor does not have the money to pay for all the transport schemes he has promised. The result - Londoners face yet more inflation-busting bus and Tube fare rises."

Transport for London's own figures show a projected budget deficit of about ?1 billion by the end of the decade. The dramatic expansion of the bus network has also come at a cost. The payment to the private firms is ?512 million, rising to ?775 million by 2008-9.

This is driven by four factors - the need to expand the network to meet London's growth, higher wages, performance bonuses for bus companies, and the cost of new vehicles. Last week Mr Livingstone said the battle to balance TfL's budget was "almost done" but admitted fares would have to rise for years.

Tony Travers, of the London School of Economics, said money could be saved by making the bus system more efficient. He said: "Common sense suggests, to anybody who observes the bus system, that it would be possible to deliver a better service for less money by a certain amount of rationalisation.

"Most of the buses you see are empty yet any bus you travel on is full. That conundrum that Londoners will recognise is an indicator of a lot of unused capacity."