WS Atkins attacks Government over Tube

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The Independent Online

One of the lead contractors involved in the part-privatisation of London Underground launched an attack yesterday on the lack of joined-up thinking within the Government.

One of the lead contractors involved in the part-privatisation of London Underground launched an attack yesterday on the lack of joined-up thinking within the Government.

Keith Clarke, the chief executive of WS Atkins, which has a 20 per cent stake in the Metronet consortium, said there was a disconnect between ministerial pronouncements and action on the ground. "Announcements are made and nothing happens. The gap between policy and implementation is wide and widening," he said. Mr Clarke refused to be drawn on specific examples but said he was thinking in part about Public-Private Partnerships (PPP) such as the deal to hand over the Tube system to private contractors and the Private Finance Initiative (PFI).

Atkins is one of the biggest players in the privatised rail and road sectors and relies on the Government or regulated industries such as the utilities for 70 per cent of its £1bn turnover. The company is involved in advising the Government on road pricing and is also a big subcontractor to Network Rail, the state-backed operator of the rail system.

Atkins increased pre-tax profits in the first half of the year by 50 per cent to £26.6m, thanks partly to the contribution from Metronet, which has taken over two-thirds of the London Underground. It made a £5.5m profit on its stake in the consortium, suggesting that Metronet overall will have made a £27.5m profit in the first six months of the year.

But profits from work carried out for Metronet slipped from £2.5m in the previous year to £300,000 due to delays in the capital investment programme. The company is investing some £7.5bn in the London Underground over a seven-and-a-half-year period. Mr Clarke defended the PPP for the Tube by saying the Underground would have been in "terminal decline" by now had the private sector not been able to step in. Metronet is responsible for the sub-surface lines, including the District and Circle, and a number of deep Tube lines, including the Bakerloo, Victoria and Central.

Turnover for the period was flat at £463m but margins rose sharply in its non-transport divisions, enabling Atkins to double the interim dividend to 4p.

The chairmanship of the company will pass to Ed Wallis, a former chairman of Powergen, when Michael Jeffries retires in January.

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