Tube firms' £100m profits

Private-sector firms running London Underground have made profits of about £100million in their first full year in charge - as figures reveal how losses on the Tube have soared to staggering levels.

Tube Lines, which operates the Jubilee, Northern and Piccadilly lines, has already announced profits of £41million for the year and a £552,000 pay package for its chief executive, Terry Morgan.

The private-sector companies may be racking up huge profits in only the first year of their 30-year contracts but London Underground is expected to report at the end of the month that it remains significantly in the red.

New Department for Transport figures today reveal that losses on the Tube soared 15-fold from £50million in 1998 to £756million last year.

There were calls today for the National Audit Office to launch an immediate investigation into the future running of the Tube under the public-private partnership, or PPP. Tony Travers, transport and public policy expert at the London School of Economics, warned: "It appears clear that Underground managers, especially in the last days before PPP, lost control of costs and lost day-to-day control of the management of the system.

"There needs to be an explanation for these very big jumps in operating costs. There is a major public accountability issue here and there are grounds for the National Audit Office or the Audit

Commission to investigate whether, under the PPP in future, the Underground is being run efficiently and effectively."

Cynthia Hay, of the London pressure group Capital Transport, said: "The PPP is a lousy deal for Londoners. Commuters have every right to be angry - the service continues to break down and fares continue to go up."

The scale of the financial problems taxpayers face with the Tube are revealed in figures that show fare revenues in the past year rose by only two per cent to £1.16 million, while costs are expected to escalate to new highs.

In the previous year, costs soared more than 20 per cent to £1.62 billion and the new Department for Transport statistics show that, in five years, costs have risen by £1billion or 150 per cent. Transport for London blamed the "make-doandmend" culture of the Tube prior to the increase in government spending on the system.

Paul Godier, the last LU managing director pre-PPP, said the rising operational costs resulted from a "finger in the dyke" mode of management needed to keep the Tube running. Sir Malcolm Bates, chairman of LU in its last five years, refused to comment on the figures.