PFI Fiasco

Everybody must have heard about the tube strike in London, affecting millions of commuters, tourists and visitors alike. While the strike itself was unjustified, it has the merit of putting the light on one of Gordon Brown greatest failures, the Public Private Partnership for London Underground. For Labour politicians, PPP must look like the best of both worlds and there undoubtedly something deeply linked, to the infamous ‘third way’ in the idea of public and private finance working together.

As usual the facts are not to the advantage of the Labour Party, since Metronet as gone bankrupt it is fair to assume that the PPP is on the whole a failure. Separating train and track is not working on the railways and, there is no reason why it should be working on the Underground. In fact separation is even worse in the case of London Underground, mainly due to the fact that there is only one type of traffic using the track, as opposed to several on the railways. If one look at the history of the tube and also at other metro systems in the world, separation was never attempted and systems were and are integrated, may it be under a public or a private company.

Since Metronet is now bankrupt, Transport for London should take over instead its responsibilities, instead of paying administration fees and even for drawing another contract with a new provider. The contract with the other provider Tube Lines, could then be ended one their approbatory period ends in 2010, thence bringing back all maintenance and renewal works under the aegis of London Underground ltd, subsidiary of TfL. Heavy works like signalling renewals and new trains would be put to tender, and offered to the most competitive bidder.

I would even go further, and say that the opportunity should be used to completely revamp the existing structure of London’s transport. If projects like Crossrail or new tubes line are to be build, a healthy and well working structure will be needed, far from the bureaucracy which comes with PPP contracts. Several options are possible. The first one being the creation of a Transport for London plc, this would entail a complete reintegration of the buses and train operations into a single structure; economies of scale would follow and, opening up the capital of the company to private investors could allow billions of pounds in private money to be injected into the system. The second option would be as outlined before, for several subsidiaries to exist, London Underground ltd being one, as an eventual London Rail ltd, taking over the operation of Crossrail and Overground lines.

So far it seems that Labour transport policy is a complete failure since 1997, it is however not too late to end the current lunacy based on bureaucracy, lengthily contracts and micromanagement. This is providing of course that pragmatism triumph over ideology.