Another nail in the PPP’s coffin

The rejection on Friday by an indpendent adjudicator of £327m claims by Tube Lines against Transport for London may well spell the end of the scandalous PPP contract. Tube Lines had argued that TfL was responsible for cost overruns on the delayed Northern and Jubilee contracts because of changes in scope but the adjudicator, in amazingly forthright language dismissed the claim out of hand, awarding costs to TfL.

The language of the adjudicator, a QC, suggeted he found the whole Tube Lines claim without merit, calling it ‘labyrinthine, artificial and unconvining’ and one that seems to have been ‘fashioned with the benefit of hindsight’. You don’t get language much stronger than that from lawyers.

The case highlights precisely the way in which the Public Private Partnership is nothing of the sort. There is no ‘partnership’ if one side is launching constant litigation against the other but that is the way which Bechtel is used to conduct business. Bechtel got this contract very wrong, failing to understand the difficulties of fitting a new signalling system on old metro lines Its default response, as with the Eest Coast Main Line scheme,  has been to argue that none of this was its fault,  and therefore it called on M’Learned friends.

Tube Lines has now learnt that even though the contract was designed by the government to deliberately favour the private contract, there is no guarantee that the contractor will necessarily win in the courts. it is highly unlikely, therefore, that the company will want to continue the contract after the review period given that the amount of money available is nothing like the £5bn, let alone £7bn, it sought. Watch, therefore, for a quiet negotiated end to Gordon Brown’s oh so clever way of losing vast amounts of taxpayers money.

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