London Underground

The Metronet contract was supposed to deliver 35 station upgrades in three years: it delivered 14. It was supposed to deliver them at a cost of £2 million: delivery actually cost £7.5 million. It was supposed to deliver an extensive programme of track renewals: only 65 per cent. of the work was completed. That lamentable failure is clear from the Select Committee report. This evening's debate was ably opened by the hon. Member for Liverpool, Riverside (Mrs. Ellman), who had the unenviable job of substituting for the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). I am sure that we all wish her well. I have been fascinated by all the contributions. Clearly, we are not here to discuss the basic structure of public-private partnerships. Rather, our debate is about the failed Metronet contract, the awarding of the contract in particular circumstances, its operation and its failure to deliver. As the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) pointed out, the basic structure of PPP or the private finance initiative is that the private sector can undertake infrastructural investment on behalf of the public sector. The exact structuring of the contracts will differ from project to project, but that structuring should transfer risk from the public to the private sector. The failure to do so in this case is a failure of this contract, not a failure of the general. PPP contracts allow the public sector to access facilities—for example, world-class project management and engineering talent—that would not otherwise be available to it; value for money can be guaranteed; and there can be innovation in working practices. The basic structure of the PPP is that the private sector delivers the best for the public sector when the private sector is told what outputs to deliver and decides how they are to be delivered. That is at the heart of tonight's debate and at the heart of the failure. It is clear that this PPP did not follow that stricture from the beginning. In 1998, the London Transport board had been informed of the need to investigate alternative methods of financing the London underground, including a future investment programme for the next 25 years. It is worth remembering that at that stage the whole bus system was running at break even and the whole of the London transport system was costing the taxpayer only £130 million. The bus network costs a net £700 million now and a total cost of more than £2 billion.