Tube PPP 'cost too much at £1billion'

The partial-privatisation of the Tube has left taxpayers with a £1billion bill, a damning report reveals today.

There were cheaper ways of introducing the Public Private Partnership (PPP) deal for maintaining and upgrading London Underground, the House of Commons Public Accounts Committee report said.

Committee chairman Edward Leigh said: "It appears to have cost the public purse the best part of ?1billion to set up and finance the deals in this way.

"The PPP deals ... are inherently complex and have led to enormous costs for the taxpayer. The set-up costs to the public sector include LU's costs of £18million and the payment of ?275million of bidders' costs."

Under PPP, two infrastructure companies, Metronet and Tube Lines, are now responsible for maintaining and upgrading the Underground.

The committee's report said a bond financing scheme would have been cheaper than the PPP financing costs.

A recent inquiry by the Commons Transport Select Committee was also sharply critical of the PPP scheme.