Profits down the Tube: Metronet posts Â£50m but won't pay bonus
Sunday 17 October 2004
Metronet, the company running two-thirds of the London Underground under the controversial public-private partner- ship, has generated profits of over £50m in its first year.
The disclosure of its pre-tax profits will be contained in Metronet's annual report, due to be filed at Companies House next week.
The report will also show that Metronet's profit margin was around 14 per cent, and this is expected to spark an outcry from the rail unions, which are unhappy that private companies are making profits from running the Underground through a public subsidy.
Metronet is, however, likely to head off the public lashing that the other Underground contractor, Tube Lines, received when it announced its annual results earlier this month. Tube Lines, which runs the Jubilee, Northern and Piccadilly lines, posted a £41.6m pre-tax profit and controversially paid its chief executive Terry Morgan a £100,000 bonus.
In contrast, Metronet's executive chairman, John Weight, will receive no bonus, although this is because he has been in his role for less than a year.
Metronet is owned by Atkins, Balfour Beatty, Bombardier, EDF of France and Thames Water, and consists of two separate companies. Metronet BCV runs the Bakerloo, Central, Victoria and Waterloo & City deep Tube lines, while SSL is responsible for the sub-surface Metropolitan, District, Circle, Hammersmith & City and East London lines.
Metronet will also publish its latest performance report to coincide with its results, and in this respect the company's first year was mixed. BCV was fined £4.9m for missing targets on train availability and the completion of overnight maintenance. But SSL received a £4m bonus for meeting its goals.
In his report on the first year of the 30-year PPP, London Underground's managing director, Tim O'Toole, declared that, "the jury is still out on the PPP".
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