Metronet swallows £14m a week as contract wrangles continue

The cost of keeping London Underground maintenance firm Metronet in administration is set to escalate past £500m, the rail workers union said yesterday.

Metronet, which held the contract for maintenance and upgrades on two-thirds of the capital's Tube network, went into administration last July, after failing to secure funding to cover an estimated £2bn in cost overruns. Metronet shareholders WS Atkins, Balfour Beatty, Thames Water, France's EDF Energy and the Canadian train maker Bombardier refused to provide the cash, as did the Public Private Partnership arbiter Chris Bolt, who turned down an initial request for £551m in favour of a reduced sum of £121m. Since July, the company has been run by administrators at Ernst & Young.

The Government has estimated that the first six months of administration cost £345.5m. Yesterday the RMT called this a "shocking waster of public money", and added: "With another £14.4m being swallowed every week, the extra cost will pass £500m if the Metronet contracts remain in administration on 2 April".

Metronet's contracts, which cover work on most London underground lines, including the Bakerloo, Central and City lines, were supposed to pass into public hands in mid-January. The Jubilee, Northern and Piccadilly lines are covered by a different contract, awarded to Tube Lines.

"Protracted delays, including wrangling over contracts awarded by Metronet to its own shareholders, have meant that the target date of 18 January for getting the contracts back into the public sector under direct Transport for London control has been missed," the RMT said. It urged ministers to "end uncertainty over the future of essential Tube upgrades and lift the shadow of insecurity from thousands of essential infrastructure workers".

RMT's general secretary, Bob Crow, said that if the Metronet contracts continue to remain in administration, upgrades required to prepare the Tube network for the 2012 Olympic and Paralympic games may be threatened.

"The long and the short of it is that the privateers who walked away from Metronet are still draining tens of millions in public money out of the Tube network," Mr Crow said. "It is unacceptable that the greed of parasitic shareholders should be allowed to undermine the capital's Tube network and the security of the workforce who will be delivering Tube improvements long after Metronet is forgotten."

A Transport for London spokesman disputed the RMT's portrayal of the situation. "The RMT is wrong to claim that Metronet's administration will cost taxpayers or fare payers any more than originally planned", he said. "At the start of the administration process, we allocated funding to cover Metronet's costs and sufficient funding remains. There is no need for us to call on additional public funds."

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