Metronet agrees deal after Central Line crash

Metronet, the consortium poised to take over most of London Underground, has struck an agreement with the Tube to insulate it from the repercussions of the crash and current stoppage on the Central Line.

The consortium of five companies also denied rumours that the massive problems on the Central Line had scared off the banks and investors needed to finance Metronet's takeover of eight lines – including the Central Line. Metronet needs to raise £3bn to complete the much-delayed deal.

City and industry sources had speculated that the accident at Chancery Lane last month and the extensive work needed to correct the fault that caused the accident had high-lighted the risks on the Tube deal to financiers.

"The Central Line problem has brought home the risks. What if this had happened after Metronet had taken control?" the chief executive of one engineering company said.

There is no date for Metronet's Tube contract to be signed, which would see it take over the maintenance and upgrading work on the Bakerloo, Central and Victoria lines, as well as five sub-surface lines.

The last date for completing the £12bn, 15-year deal was "early in the new year" but that was not met. It is now aiming for the first week of April.

Rod Hoare, Metronet's chief executive, declared it was "absolute crap" that the consortium was having problems raising the cash. "We have presented to the banks and it has been oversubscribed. We will go to the bond market in the next 10 days," he said.

Metronet is looking to raise £1.1bn from a group of lenders led by Deutsche Bank and £1bn from issuing bonds. Metronet said it also has in place a £600m loan from the European Investment Bank and £350m of equity from the five shareholders in the consortium: Bombardier, Seeboard, Balfour Beatty, Thames Water and WS Atkins.

Mr Hoare said that, if the Central Line work was not complete by the time Metronet was ready to sign the Tube deal, the consortium would not be financially "responsible" for the ongoing work.