Railtrack threatens to ditch Tube

Talks stumble on row over station ownership

RAILTRACK is threatening to pull out of a controversial deal to run some of London's underground lines. The privatised rail operator is furious with the Government after it imposed what Railtrack sees as unfair restrictions on the scheme.

If the deal falls through, Railtrack could scupper its plans to build links between the tube network and mainline services.

John Prescott, the Deputy Prime Minister, ruled earlier this year that Railtrack was its preferred partner to take control of the network's "sub- surface" lines: the Metropolitan and Hammersmith, Circle, District and East London lines.

Railtrack would then agree to develop new rail links. Plans under discussion include connections from the East London line, which runs under the Thames, to mainline networks across London. The Heathrow service may also be extended to Liverpool Street using the Circle line infrastructure.

Other parts of the network are to be offered for tender in two lots but Mr Prescott gave in to Railtrack's insistence that it had to be given control of the sub-surface lines before it would build links with the Channel Tunnel and mainline services.

But The Independent on Sunday has learnt that the Government has barred Railtrack from owning the stations on the sub-surface lines, which include sites in some of the richest areas in London: Kensington, Chelsea and the City.

"This issue is putting a major strain on negotiations," one senior Railtrack source said. The income from offices and shops in Underground-owned property in the station complexes is currently around pounds 50m a year. But Railtrack had big plans to develop the sites and make much more cash.

"There's a lot of equity lying around those stations," said a property market source. "They make about pounds 50m each year now but if more of those stations are redeveloped, the money to be made is limitless. This is the honey that Railtrack wanted."

The Government says it made it clear from the start of negotiations that tube stations were not part of the privatisation package. "They are not part of the deal and that's all there is to it," A spokeswoman said.

Rather than hand over tube stations to Railtrack, London Underground will enter into joint ventures with property companies to redevelop and refurbish when needed. Eventually, the stations could be sold off to the private sector.

The next tranche of privatisation will take in the "deep lines": the Bakerloo, Central, Victoria and Waterloo & City. The winner will control the infrastructure, but not the operation of the trains, for 30 years. It will be paid through revenue-sharing agreements.

Bids for these lines were received last month. Bidders include ISTG, a group including Taylor Woodrow, Siemens, Innisfree and Mott MacDonald; Linc, a consortium with Adtranz, Balfour Beatty, Seeboard, Thames Water and WS Atkins; and TubeRail, which includes Alstom, Amec, Brown & Root and Tarmac.

The third group of lines includes the Northern, Piccadilly and Jubilee. Bids for this section will be invited by the end of the year.

It is believed that London Underground makes an operating profit of pounds 250m on revenues of pounds 800m.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders