PPP firms claim delays cost millions

PRIVATE-SECTOR companies waiting to take over huge sections of the Tube warned today that delays in completing the deal are losing them millions of pounds.

London Underground expected by now to have signed the first contracts with the two consortia selected to operate the public-private partnership (PPP) for the next 30 years. But a legal challenge by Mayor Ken Livingstone to halt PPP is due to start in the High Court two weeks from today.

Tube directors have delayed signing contracts at least until the outcome of the case, which is certain to go to appeal whoever wins.

The consortia have spent tens of millions of pounds each preparing their bids but have yet to see any return, although their eventual profits will be enormous. Their plight, however, will raise little sympathy from Livingstone, the rail unions and other critics of the partial sell-off who have long condemned the scheme both on financial and safety grounds.

In addition to the Mayor's legal challenge the rail unions have launched a separate action claiming that safety on the Tube will be reduced.

The Government denies the PPP is privatisation and says £16bn, a combination of taxpayer funding, income from fares and private-sector finances, will be spent maintaining and refurbishing the network during the first 15 years of the contracts.