It is not often that journalists can claim that they were 100 per cent right, but the imminent collapse of the Metronet contract for maintaining and refurbishing two thirds of the London Underground shows that my longstanding doubts about this sort of contract were well founded.
The problem with the London Underground PPP is that it was simply attempting the impossible. Not only did it try to set out the work required on the Underground over a 30 year period – far too long – but it did so through a complex payment by results scheme that was always going to prove unworkable. Moreover, it encouraged far too much work to be carried out simultaneously, stretching the management capabilities of any organisation.
Then there was the specific nature of Metronet, not really a company in itself but a consortium of suppliers all eager to make a profit out of the deal It was never its own master and should never have been awarded the two contracts on the basis that a supplier led organisation was never going to have a transparent and cost effective supply chaing.
While the company with the other third of the Underground contract, Tube Lines, does seem to be working effectively, the whole notion of 30 year PPPs for a task as complicated as maintaining and refurbishing the London Underground just does not make sense. The crucial question now will be whether there will be enough time to sort out a more sensible arrangement, or whether the Treasury will push for the replacement of Metronet with another supplier under the same terms.
It would not make any sense for a PPP Mark Two to be created in this way, but then the PPP in the first place never made any sense, as demonstrated in my book, Down the Tube, which sadly is out of print – though I have a few copies left myself.
