London tube privatisation in jeopardy, says business lobby

THE GOVERNMENT is likely to miss its deadline of part privatising the London Underground by April 2000, business leaders warned yesterday.

This could jeopardise plans by ministers to attract up to pounds 10bn of private capital into the Tube system through a public-private partnership.

It could also mean that the new mayor of London, who will have political responsibility for the Underground, will be voted into office before contracts have been signed with private consortia to take over the network's infrastructure.

Business leaders fear that this could slow down the process still further. London First, the business lobby group that is chaired by Lord Sheppard, the former GrandMet chairman, said potential bidders feared the timetable announced in August by the Deputy Prime Minister would slip.

Irving Yass, London First's director of transport and planning, said: "We have talked to 14 companies and they all think the timetable will fall behind. If the mayor is elected before the contracts are signed, that will pose a major problem for the Government which ministers have not yet thought through."

On present timing, the intention is to elect a mayor by May 2000, following the passage of the Greater London Authority Bill through Parliament. This is one month after contracts are due to be signed off under the public- private partnership for the Underground.

The mayor will implement transport policy through a new body, Transport for London, which will be in charge of a new London Underground operating company. Business leaders are fearful that if the elected mayor turns out to be ambivalent about the privatisation of London Underground, or openly hostile, then hopes of attracting private capital will be undermined.

The warnings about the timetable came from Railtrack, contractors such as Brown and Root, Alstom and Balfour Beatty and a number of financial institutions including Barclays and HSBC.

They are among more than 100 companies the Government listed in August as being interested in the part privatisation of the Tube. Ministers estimate that pounds 7bn of investment needed to modernise the network and a further pounds 3bn to maintain the existing infrastruture could be raised through the public/private partnership.

There are likely to be three companies in charge of the infrastructure, which will take over the running of the track, stations, signalling and rolling stock, provide the investment and charge the publicly-owned operating company a rental to use the network.

One contractor, Amey, has already said that the Government would be better to opt for a full-blown flotation of the London Underground, rather than a public-private partnership.

PROMOTED VIDEO
Life and Style
food + drink
Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
Life and Style
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments