Metronet contract failings must bring changes

30 January 2008
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30 January 2008 | Jake Kanter

A group of MPs has urged the government to give greater consideration to future public-private partnerships.

Following the collapse last year of Metronet, the firm upgrading the London Underground, (News, 2 August 2007) a report by the Transport Select Committee said the firm's "pathetic under-delivery" must be taken into account when entering future agreements.

London Underground was criticised for failing to take action about Metronet's "tied" supply chain, which saw much of the work to revamp nine of 12 tube lines awarded to the firm's shareholders. The committee said giving contracts to parent companies Atkins, Balfour Beatty, Bombardier, EDF Energy and Thames Water - who were all shareholders in Metronet - lacked efficiency and economic sense.

They argued the firm's failures highlight that the private sector can "fail to deliver on a spectacular scale", and the MPs demanded greater transparency in future infrastructure contracts.

The report stated: "Future assessments of the comparative value for money of private sector-managed models for infrastructure projects should not assume a substantial efficiency savings factor; a detailed assessment should be made of the suitability of the proposed structure of delivery organisations, of bidders' specific expertise and of the strength of the incentives to efficiency."



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