Jubilee line may be saved

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The Independent Online
LONDON Underground has offered to rent a 270,000 square foot building in Canary Wharf in a deal that could save the pounds 1.7bn project to extend the Jubilee line to Docklands.

A senior source at London Underground yesterday confirmed that it was in talks with the administrators of Canary Wharf, Ernst & Young, which could lead to it renting the building at 30 South Collonade.

It is estimated that the property could cost London Underground about pounds 4m a year and would enable the adminstrators to sell the building for about pounds 50m.

The London Underground deal is conditional on the Government giving the go-ahead for the Jubilee line extension. A senior source said: 'There is no linkage, but it is London Underground's policy to locate all our staff next to a tube line.'

The Government is considering an offer from the banks, which have lent pounds 600m to the beleaguered Canary Wharf project, in which they would contribute the equivalent of pounds 180m to the Jubilee line project.

However, the Government is unhappy about the condition on the deal that it should relocate about 2,500 civil servants from the Department of the Environment to a 500,000 sq ft building at 20 Cabot Square in Canary Wharf.

Despite comments by Michael Howard, the environment minister, that the department would move to Docklands, government advisers have indicated that the preferred option would be to relocate the civil servants to vacant offices in Whitehall.

The Government has asked the banks to remove the condition, but a senior banker said the banks did not want to commit any more money unless they could be assured of an income stream from Canary Wharf.

The London Underground offer could solve the problem and allow the banks to release the pounds 180m to the Government.

London Undergound has been angered by the delay in approving funding for the Jubilee line extension and livid about the possibility of it being cancelled. It has argued that nearly pounds 200m has already been spent on the extension, and the cancellation could cost another pounds 100m.