PPP speaks to major players about cost of contracting out station work in benchmark exercise
Tube Lines is analysing how it runs its station enhancements programme, speaking to contractors about how much it would cost to contract the work out.
Major players in the transport sector have costed schemes, with the public private partnership insisting the process is intended as a benchmarking exercise.
The review comes ahead of the PPP submitting its reworked costs to the private partnership arbiter in July.
The PPP, co-owned by Amey and Bechtel, is responsible for the maintenance and upkeep of all the infrastructure associated with the Jubilee, Northern and Piccadilly lines on London’s underground network.
A source close to Tube Lines told Construction News that it was reviewing its strategy of acting as contract manager for all its work.
“At the moment they are bringing in trade labour to do all the work, including things like tiling and painting,” he said. “But they have now been speaking to contractors in a number of meetings about managing the enhancement and modernisation jobs on a station by station basis.”
Tube Lines is currently drawing up its plans for the second review period of the 30-year PPP contract it has with London Underground.
If it decides to go ahead with the new system more than 50 stations could be up for grabs, with an associated value ranging between £50 million and £100 million each over the seven and a half year basis of the second review period.
So far Tube Lines has been speaking to a number of contractors regarding the work including Skanska, Costain, Morgan Est and Balfour Beatty.
But Tube Lines maintains that its centrally managed stations programme will continue to realise greater efficiencies.
A Tube Lines spokeswoman said: “We are currently working through our first review period and as part of that process we need to review our costs, evaluate how we have worked and confirm everything has been done economically and efficiently.
“In addition, looking forward, we need to calculate how and where we can make further savings during the next review period. To that end, and in respect to the stations programme, we have carried out an exercise to help us validate our costs in the market place and assure ourselves that our prices are indeed competitive.”
Last year PPP arbiter Chris Bolt said Tube Lines can spend between £5.1 billion and £5.5 billion in its second review period.
This was some £2 billion less than the £7.2 billion it requested to spend and Tube Lines has until mid-June to resubmit the reworked costs.
Tube Lines is currently six years into its first review period and in its results last week Bechtel declared that it had finished 60 London Underground stations, renovated 130 escalators and upgraded 100 km of track so far.
In Q3 of 2008/09 it spent £120 million on infrastructure and said it was continuing to make good progress on the upgrade of the Jubilee Line.