Metronet collapse may cost £1 billion

[D306]

http://news.bbc.co.uk/1/hi/england/london/7007324.stm

Metronet collapse 'may cost £1bn'

Transport for London says it wants to take over Metronet's contracts.
Taxpayers could be faced with a £1bn bill following the collapse of the Tube maintenance firm Metronet, an independent arbiter has said.
Chris Bolt said the consortium could be owed up to £470m for work over and above that specified in its contract.

Mr Bolt, a PPP arbiter, said it could also be due between £230m and £600m to cover cost increases.

Metronet was upgrading nine London Underground lines before going into administration in July.

Mr Bolt's views came in what he described as his "initial thoughts" on the financial situation regarding Metronet. His final thoughts will come later in the year.

Transport for London has said it wants to take over the Metronet contracts.

 

[Nick W]

Time to ditch the nuke warheads then.

 

[Dennis]

"Chris Bolt said the consortium could be owed up to £470m for work over and above that specified in its contract."

So why were Metronet performing work they were not contracted to do? I wouldn't pay if the plumber I called in to mend a leak installed a new shower! Could this situation be argued as being a breach of contract?

 

[DavyCrocket]

Well that's the workings of the PPP!

LUL can make the Infracos do extra work, they will then either bill LUL for it, who will probably argue it! Or the Infraco will do it for free and earn it back through their performance bonuses, through things like improving journey times or ambience.
Then LUL can stipulate what sort of tiles have to be used, then there is the change in what materials acn be used or stored on LUL premises, refused or frustrated access.

Also with most of the work, the Infraco must carrt out the work, then charge LUL for it. Dennis' example of the plumber is one. If there is a leaking tap in a room, a job would be raised by LUL to the Infraco report centre. The Infraco would then send round a contractor with all the correct licences, qualifications and permits to enter LUL premises. The Infraco, will then (attempt!) to get the cost of this back from LUL, at an inflated "Tube" price of course!....

Personally, I believe that Metronet are owed payment from LUL for work carried out (including post Chancery Lane and 2007 Bombing).