Transport for London’s £310 million buyout of public private partnership tube upgrade contractor Tube Lines could mean a reduction in work, industry figures have suggested.
The deal, agreed late last week, will see TfL buy Bechtel and Amey’s shares in the PPP firm, responsible for works on the Northern, Jubilee, and Piccadilly lines.
While Amey will stay on to carry out day-to-day maintenance for another seven-and-a-half years, Bechtel will be phased out of its role carrying out capital improvement works once the deal is completed in June.
One industry insider said: “At this stage it remains to be seen whether they put the work out to market.”
The source said the eradication of the PPP and private contractors’ input into the works would make it easy for TfL to decrease the scopes of projects.
“The primary concern is that they will put the brakes on. If budgets are tight, this deal gives TfL that flexibility, which is worrying.”
He said that now TfL had assumed total control of PPP programmes - having bought out collapsed PPP contractor Metronet in May 2008 - it could procure works across the entire network.
“This also gives TfL benefits of scale in that it can procure across the Metronet and Tube Lines sections of the network.”
However, one contractor source told Construction News he expected little work to be let as a result of the agreement.
“Everything will be de-scoped. Bringing it back in-house just seems like a burden.”
The source also expressed a concern that too many consultants would be kept on when Tube Lines becomes a wholly-owned subsidiary of TfL, and that this could hamper the progress of work.
“They’ve got to get rid of the hundreds of consultants on board. We’ve seen enough with Metronet; a lot of the incumbents are still there.”
A TfL spokesman said that its subsidiary London Underground would continue to work with the private sector and reiterated that completing the Jubilee line upgrade was the first priority.
TfL will now review Tube Lines’ upgrade programmes for the Northern and Piccadilly lines to establish how best to deliver them.
The buyout ends a long-running dispute between London Underground and Tube Lines over the cost of the next seven-and-a-half-year period of upgrade works, scheduled to begin in July.
LU was told by PPP arbiter Chris Bolt that it may have to de-scope the works to be carried out by Tube Lines over that period.
Having set the price of the work at £4.46 billion in March, Mr Bolt deemed that LU was unable to afford it.
The arbiter’s final directions compared with Tube Lines’ most recent bid of £5.75bn and London Underground’s valuation of £4bn.