Metronet fines capped at £4m for Tube closure

The private sector consortium that has taken over two-thirds of the London Underground network disclosed yesterday that the maximum penalty it faces is a 48-hour fine even if an entire line is closed down for months on end.

Metronet, which has taken control of nine deep and sub-surface Tube lines, said that in the event of another Central Line-style closure, the most it could be fined by Transport for London is to £4m – the same as it would be charged for a two-day shutdown.

The Central Line was closed entirely for 10 weeks in January after a train was derailed entering Chancery Lane station and will still not be fully operational again until Easter. The closure has cost £20m to London Underground and tens of millions of pounds more in lost profits to West End shops. John Lewis alone estimates that the closure has cost its flagship Oxford Street store £10m-£12m.

Rod Hoare, the chief executive of Metronet, said that in only 5 per cent of cases could it be fined more than £4m for failing to provide working tube lines to TfL.

Senior Metronet sources stressed that had the consortium been in charge at the time of the Central Line derailment, it would not have been closed for such a long period. "There are different ways of looking at it and different ways of dealing with it. The line would not have been shut for more than two months," said one source.

Metronet, which is made up of Balfour Beatty, W S Atkins, Seeboard, Thames Water and the Canadian train manufacturer Bombardier, has pledged to invest £17bn in the network over the next 30 years including £7bn in the first seven and a half years.

Over that initial period the five consortium members stand to earn £450m in profits from their £350m equity investment.

They could earn the same amount again from supply contracts with Metronet which has placed all its train orders with Bombardier, most of its track renewal work with Balfour Beatty and the order for civil engineering and station modernisation work with a consortium of Atkins, Balfour Beatty, Seeboard and Thames Water.

Mr Hoare maintained that all the contracts were tendered for competitively and included in its bid which beat off two rival consortia.

Of the £17bn being invested over the next 30 years, Metronet has raised £3bn itself, mostly in the form of bonds and bank loans. The remaining £14bn will come from government grants paid to TfL, which will continue to be responsible for setting fares and operating services.

The investment will include new fleets of trains for the Victoria and Bakerloo lines and enlarged fleets for the four sub-surface lines – the Metropolitan, Circle, District and Hammersmith & City and the modernisation of 132 stations. By the end of the third year Metronet is scheduled to have refurbished 26 stations and improved reliability by 20 per cent on the Bakerloo, Central and Victoria lines and by 30 per cent on the sub-surface lines.

Metronet has also contracted to give each station a "deep clean", remove graffiti within 24 hours, install new passenger information systems at all stations and increase litter patrols.