Skip to main content

Transport for London

Volume 498: debated on Thursday 29 October 2009

My right hon. and noble Friend the Secretary of State for Transport, Lord Adonis, has made the following ministerial statement:

The ex-Metronet investment programme covers the upgrade, maintenance and renewal of infrastructure on the Bakerloo, Central, Victoria, Waterloo and City and the sub-surface (Metropolitan, Circle, District, Hammersmith and City) lines. It will deliver nearly 30 per cent. more capacity across the network, improving journey times and reliability.

Following the administration of Metronet in July 2007, its assets and obligations were transferred to Transport for London in May 2008 as an interim measure. The former Mayor and Secretary of State for Transport tasked a Joint Steering Committee consisting of Transport for London (TfL) including London Underground Ltd (LUL), the Department for Transport and HM Treasury with considering a range of options for the permanent structure of the Metronet contracts, with the objective of providing a stable and safe operational framework and delivering the modernisation, upgrade and maintenance of the tube infrastructure at an affordable price that offered value for money for the taxpayer.

The Mayor and I have accepted the committee’s recommendations that the contracts inherited from Metronet should remain under the direct management of LUL as the best value option under the present circumstances, with the majority of upgrades already underway. Some of these contracts have since been renegotiated to secure more favourable terms for LUL. Future contracts will be procured directly by LUL, including robust performance incentives and transferring risk where appropriate. LUL will remain responsible for all asset management decisions, but there will continue to be substantial private sector involvement through the contracts managed by LUL. A decision on the most appropriate contracting arrangement for the Bakerloo line upgrade (which has not yet started) will be taken nearer the time, reflecting lessons learnt from the earlier upgrades.

LUL is investing in its management and organisational capacity and capability in order to meet this new challenge. Organisational restructuring within LUL has also created a clearer separation of client and delivery functions, with a defined sponsor for each project.

Underpinning these new arrangements and responding to the increased size of TfL’s investment programme are new scrutiny measures at Transport for London. The Mayor will establish an independent advisory panel with remit extending across the entirety of the TfL investment programme, including all maintenance, renewal, upgrades and major projects across the modes, but not operations.

Members of the new panel will be appointed by the Mayor from a shortlist agreed with me. The Mayor and I will also agree the panel’s terms of reference. The panel will report to the TfL board and the Mayor as its chair. The members of the panel will have experience in a range of disciplines including engineering, finance and project management, ensuring that as a whole the panel will be able to offer expert advice, opinion and challenge on all aspects of TfL’s investment programme, including the ex-Metronet works.

The panel will be able to review all aspects of project delivery including cost and programme deliverability. It will also review delivery of the investment programme at a portfolio level, including management and organisational capability and the efficiency, effectiveness and economy of delivery of the investment programme. The panel will report its findings directly to the TfL board, who will also receive a TfL management response setting out how the issues raised have been or will be dealt with. The panel will commission other reports as it or the TfL board consider appropriate. It will publish an annual report making overall conclusions on the delivery of the investment programme. Copies of all reports will be provided to me, in view of Government’s significant contribution to the investment programme through the GLA transport grant which accounts for just under 40 per cent. of TfL’s total income.

These new arrangements build on the work of LUL during the interim period and will offer the stability and certainty LUL need to deliver the investment programme inherited from Metronet and with it the improvements so critical to growth and prosperity in London.

These arrangements are in accordance with the existing framework of devolution of powers to the Mayor, who now bears full responsibility for delivery of the upgrade, maintenance and renewal work previously the responsibility of Metronet.

Tube lines will remain responsible for the upgrade, maintenance and renewal of infrastructure on the Jubilee, Northern and Piccadilly lines under its PPP, with independent scrutiny provided by the PPP arbiter.