A tricky and dirty business maintaining, let alone modernising the world's oldest underground railway. And that also sums up the attempts to rescue the capital's underground system from its  legacy of grime  and inefficiency. London's claim to be the world's leading capital status is constanly let down by its old, nasty tube system. Even the hell that was the subway in New York was sorted by an energetic transport authority into something that you'd have no hesitation about riding with the family. It also has its financing problems, but then so do all public transport systems.

I often stand on the platform at Leicester Square, look at the tourists taking in the grimy mess and feel ashamed. The overall shabbiness, services and all, has long been a complaint, and never solved by public spending on its own. Politicians, local to London, and ministers and MPs have never found themselves able to risk a vote on the sort of 30 year plan that the capital's underground demands. The costs are simply beyond the usual public spending event horizon.

Enter, then, around the turn of the century, Gordon Brown and his preferred method of financing huge public sector projects, the so-called Public Private Partnership, (PPP). In essence, for a project like a new hospital building, the private sector partnership raises the money, builds the project and then leases it back to the public sector for a usual term of 30 years.

It's worked on the whole rather well with the relatively simply task of public buildings and such has become the City's expertise in putting the PPP deals together, it's become a huge export earner.

But London Underground proved to be a very difficult test. The PPP scheme which was planned for its maintenance and upgrading was the largest of its kind. It was not to the liking of the then Mayor to be, Ken Livingstone, but the government forced it through. Metronet, which was responsible for most of the work has five shareholders – Thames Water, WS Atkins, Balfour Beatty, Bombardier and EDF. Most of them, I suspect are very glum today.

The whole project has been mired by what London Underground describes as Metronet's inefficiencies and Metronet is blaming the tube authorities for forcing it to do work that it wasn't contracted to do. Metronet claimed the overruns would cost them £1bn over seven and a half years. On Monday, the so called PPP arbiter awarded Metronet only £121m, which effectively would have forced two things.

Either Metronet clung on, with vastly reduced funding, and with a very risky future, or it went into administration, which it has. What will emerge? Who knows.

But the real loser is London, its commuters and its tourists. The grand scheme was to refurbish 250 stations, bring in 300 new trains and update 80% of the track. Today it looks as though, just like the trains, the money and the PPP planning have both gone down a dirty black hole or, perhaps, down the tubes.

Posted by Michael Wilson, Sky News Business Editor

Comments

[Madnurse 19 Jul 2007 17:53:12]

The main problem with public transport other than under investment as you say was the so called public servants that drove the buses and trains. During the 1970s the trade unions had far too much power but things now are different. The power of the unions has been diminished and the people of this country would not allow themselves to be held to ransom as we were by miners, postal workers. electricity workers and public transport workers in the bad old days as you call them.
If we as a nation invested in our own country instead of sending so much to the EU and Africa, I am sure we could fund publically a world class transport network. If the transport ran at times and places to suit people and people felt safe using these systems and could afford to do so, I am sure it would work. The real juxta position that makes me laugh and shoots the concept of getting people back on to public transport in the foot, is that in the 40s and 50s one could purchase a workers return before 08-00hrs whereas now this is the dearest time to travel. Clever that isn't it?
Mr Brown removed the tax relief on fuel that the bus companies got, this increased their costs overnight by a great deal. Look up how much duty is paid on a gallon of diesel and work out how much extra cost is involved for a vehicle that only does Ten miles per gallon. Again, the government wants to get us onto public transport but makes it more difficult for us to do so.
How do I know all this? One of my grandsons is an operations manager for his local bus company.

[Madnurse 19 Jul 2007 17:25:34]

Michael:

I was born in 1927 in London and in May this year I was Eighty years of age.
Most public transport was owned and operated by the local authority. This is still the case in Reading which is a about Twelve miles from my home in Henley. The bus service in Reading in my opinion is second to none.
Public transport ran where there was a social need but not necessarily a commercial viability, in other words not all routes were profitable.
These private companies are there to make a profit for their shareholders and in many cases the ethos of public service is much further down their list of priorities. It is true that over the years governments of all colours have failed to invest in the infrastructure of our transport systems. My husband was a consultant psychiatrist and I was a senior nurse, we have children and grandchildren that have followed us into healthcare and the stories they tell about managers and accountants are shocking. I am pleased that I retired some twenty years ago while we still had a medically led NHS as opposed to what we have now. The transport system is in my view suffering from the same problem the NHS has now namely too many managers and accountants that may be well qualified but have little idea about the concept of public service.

[michael wilson 19 Jul 2007 15:40:04]

All public transport should be publicly funded? I take it by 'public' you mean the transport that is provided by others rather than ourselves. No no no..you, madnurse, are clearly not old enough to remember the bad old days when 'public' transport was run for the benefit of the 'public servants' themselves. one of the last remaining is the London Underground..still mired in the appalling 'customer' relations problems that were ever thus. Of course the 'customer' pays the price of the privatised companies because that's how they exist, make profits for their owners - why else would they own- and/or their shareholders.
No, the deeper question is, how do you fund hugely expensive transport projects which need constant expensive maintenance and improvement. The only other way is, as Peter (Chelmsford) suggests is by a bond issue..it worked in the US and it could work here. in return for your money you get cheaper season tickets and so on..and there would be a market in the bonds themselves.
Ian (high wycombe) says that public servants aren't clever enough to grasp the principles of long-term contracts..nonsense..when I was 23, I was running million pound NHS conracts..I had no idea what a million pounds looked like, but I knew what the eventual project was meant to do, and employed 'experts' in all the disciplines necessary to make it work.
this will run and run..unlike the tube..thank you for all your comments
m

[Ian High Wycombe 18 Jul 2007 16:48:25]

The answer always lies with the government. If when they sold the buses and tube to private hands, they placed improvement goals on those companies. The companies would probably have not purchased them. So now they need to put improvement targets in to place. The problem is, is that there is no one clever enough in whitehall to handle such a task. So they will pay millions to some consultant who no one has ever heard of, who will come up with the same old useless ideas, and then the millions that could have been spent on the improvments will go in to his pockets.
Simple, hire some people to manage the public transport, who have an idea (Even the smallest of ideas) of what it actually takes to run a good public transport system.
This is a job for proper management of the service, not politicians and whitehall who do not have a clue

[Khalid 18 Jul 2007 14:51:16]

Indeed, sounds like all is not well down the tube well.
Alarmingly though is the absence of any sustained commitment on the part of the parties, whilst much focus is channelled towards the financial books as oppose to the safety, welfare and above all the transportation of people going about their daily lives.
London, in particular has great focus, albeit the forthcoming Olympics, however, reflecting back upon the standards and successful achievements enjoyed in places such as Japan, time to eradicate such tunnel vision and keep the flow of fresh air through the system!
On the whole, whilst I agree with a majority of your culminations Michael, I must say, I still believe we have the best transport system in the world, whichever way you look at it!

[Peter Chelmsford 18 Jul 2007 14:20:35]

In the heart of the capitalist system, why oh why can we not have transport for London>TFLsovereign status< and repayment should come out of general London taxes.

This should have been the route for the Olympic regeneration, let us have regeneration bonds, with all the people able to participate and share in the wealth creation not just the private equity players. Tax incentives could also be given on holding the bonds and they could be administered by national savings.

Holders of the bonds could also get cheaper travel and other incentives.

Peter, Chelmsford

[Madnurse 18 Jul 2007 13:47:34]

I am of the belief that ALL public transport should be publically owned and properly funded.
Both trains and buses have moved into private hands and the customer has paid the price.
If this government and previous ones,were serious about getting us peasants out of our cars and onto public transport then they should have made the transport safe, clean and affordable.
The other thing I cannot understand (well other than Chinese) is when Government agencies and regulators fine these companies who do they think pick up the bill. It is just another stealth tax in my view.
I was a great supporter of Mrs Thatcher's Conservative government but I believe she was wrong to sell off all our public services especially transport, water and power supplies.

[Morgan London 18 Jul 2007 13:16:04]

Surely the money can be got from somewhere?! Why must we Londoners suffer the day to day toil and grime of the tubes; when the government sees fit to spend billions waging wars around the globe?