Metronet failings examined

29 November 2007

29 November 2007 | Antony Barton

Tube company Metronet Rail suffered a financial crisis because it failed to understand the terms of its contract with London Underground (LU) and had little control over its suppliers.

In a select committee hearing, Graham Pimlott, Metronet chairman from January to July, told MPs: "If the specification had been much clearer at the start a lot of the problems would have been avoided."

Metronet signed a 30-year contract with LU in 2003 to revamp nine out of 12 tube lines under a public private partnership (PPP). It went into administration last July after the PPP Arbiter allowed it just £121 million of the £551 million it requested to cover cost overruns.

Pimlott explained the requirements of each tube station were more dissimilar than Metronet had been led to believe when it made its bid. He said it did not ask for more money or request changes to the plans because its contractors thought they would be paid more if they finished the work efficiently.

Tim O'Toole, LU's managing director, said: "There was no one [at Metronet] with an iron fist who could force one subcontractor to do something or fire another who was not performing, and so the cost kept accumulating."

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