Negotiations between the Treasury, the administrators of Canary Wharf and London Transport have led to a compromise over the pounds 160m private-sector contribution to the project. The administrators seem happy to accept the deal that had been held up by their concern over what would happen if there were lengthy delays in construction.
City sources confirmed that the go-ahead was imminent, and that it would also trigger the emergence of the Canary Wharf office development from administration (a type of insolvency).
The row over the 'drop-dead' clause, under which the Government would have had to reimburse the banks if the line were not completed by 2000, has been resolved. Instead of the Government reimbursing the banks, the contractors have agreed to pay them tough penalties if the project overruns.
Bankers warned that it could be two months from announcement of an agreement to its signing. The Canary Wharf project has first to be switched from administration to a Company Voluntary Arrangement - a half- way house back to normal trading.
A senior London Transport source told the Independent: 'I've never been as confident as I am now that the scheme will go ahead. We really are closing in on a deal.'
The extension, which will run from Waterloo to Southwark, Canary Wharf and Stratford, should be completed in 1998 if work starts later this year.Reuse content