Tube bidders 'about to go up Swanee' says gloating Mayor

Ken Livingstone, the Mayor of London, has declared that the giant PPP project to upgrade London Underground will not be signed until after the next general election.

Mr Livingstone, an implacable opponent of the PPP, also gloated over the financial crises affecting Amey and WS Atkins, which he said were "about to go up the Swanee". Both companies are key members of consortia selected for the three PPP contracts.

"To those firms who think they can just hang on for two or three months, that profits will flow, I can tell them that's a forlorn hope.

"They are not getting a damn penny before the next general election [expected in 2005]," Mr Livingstone told a conference in London over the weekend.

Amey, part of the Tube Lines consortium, and Atkins, a member of the Metronet consortium, need to raise £60m to £70m each to take up their part in the PPP deals. Both companies are relying on the PPP to provide vital cashflow and profits over the next few years, helping them out of their current financial difficulties.

"They [Amey and Atkins] are about to go up the Swanee if someone doesn't give them money," Mr Livingstone said.

Financial close of the PPP contracts was due on 7 November but neither consortium was ready. Tube Lines is now aiming for close on 7 December, while Metronet has admitted it cannot complete until next year.

Mr Livingstone has signalled that he will mount yet another legal challenge against the PPP. This fourth challenge would be an appeal in Brussels against last month's European Commission's verdict that the PPP scheme was legal. That could delay the project, already three years in the making, by another two years, in effect killing off the current PPP contracts.

Spokesmen for Metronet and Tube Lines said they were urgently seeking assurances from London Underground and the Department of Transport about the Mayor's latest legal threat. They said it was unclear whether the PPP contracts could reach financial close while a case is still being heard in Brussels.

A spokeswoman for London Underground said: "If Ken Livingstone goes to Europe, we are confident that we can still go ahead and conclude the PPP."

Mr Livingstone's team is waiting for the formal publication of the Commission's verdict from last month, before lodging an appeal.