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Bulk of Tube revamp costs spent on staff

Only £36m out of £140m spent on Underground PPP costs went on development

TUBE Lines has unveiled the initial breakdown of its £140 million bid costs to revamp a major section of London's Underground rail network.

The consortium, which is refurbishing and maintaining the Jubilee, Northern and Piccadilly lines, said £104 million had been spent on staff and advisors during the threeyear bidding process and a further £36 million on development costs.

A Tube Lines spokesman said: 'The major chunk was obviously spent on staff, advisors, offices and general administration costs.

'But costs were incurred not just in cash terms. These were effectively the costs to shareholders of missing out on other work because they were required to second key staff to the project.'

Team members Bechtel, Amey and Jarvis all received £46.5 million each from Tube Lines last month. The consortium will recover the bid costs back from London Underground over the 30-year contract by delivering improvements to the network.

Construction News revealed that bid costs for the part-privatisation deals reached over £300 million after Metronet, which is set to take over the Bakerloo, Central, Victoria lines and the subsurface routes, confirmed its final bill was likely to reach £156 million.

The Government this week defended the spiralling costs in response to a written question put forward by shadow trade and industry minister Henry Bellingham.

Transport minister David Jamieson said the level of the costs reflected the lengthy duration of the bidding process. He added:

'They represent only an extremely small proportion of the value of investment that will be delivered over the life of the contracts.'

The news came as London Mayor Ken Livingstone struck a deal with the Government to take control of the Tube after scrapping plans to launch a third legal challenge to the PPP.

Transport secretary Alistair Darling said:

'The Government, Transport for London and the mayor have agreed to work together to secure the transfer of the Underground to TfL concurrently with, or as soon as possible after, the completion of the PPP.'