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Tube Lines must pay £327m in overrun costs

Tube Lines has failed to win a £327 million compensation claim against London Underground following an independent ruling last Friday.

The PPP tube upgrade contractor, jointly owned by Bechtel and Amey, had claimed that London Underground was to blame for overruns on the Jubilee and Northern line upgrades but the ruling dismissed Tube Lines’ claims as “labyrinthine, artificial and unconvincing”.

The company will now have to cover the £327m as well as London Underground’s legal fees.

Acting managing director of London Underground Richard Parry said: “We welcome this ruling by the independent adjudicator, which makes it clear that Tube Lines is responsible, in full, for the costs it has incurred as a result of delays to the upgrade of the Jubilee and Northern lines. Also, that none of the allegations about LU bearing any blame for the cost increases have any foundation.”

The verdict will be a blow to Tube Lines as it continues to battle with Transport for London over a funding gap covering its upgrade work for the next seven and a half years.

Tube Lines wants £5.75 billion to complete work, including major upgrades on the Northern Line, but London Underground only wants to pay £4bn.

Last December PPP Arbiter Chris Bolt, who is negotiating between the two companies, published his draft determination on costs recommending that work should cost £4.4bn.