THE SORRY HISTORY OF PPP

RMT helpline 0800 376 3706 :: september 2016 :: RMTnews 13 T he origins of the public- private partnership (PPP) go back to 1997 when the then Tory Secretary of State for Transport, Sir George Young announced proposals to privatise London Underground based on the disastrous EU rail model already imposed on Britain’s railways. EU directive 91/440 and subsequent EU rail packages encourage the splitting of rail infrastructure and operations, handing them over to the private sector and hiving off individual lines or groups of lines to franchisees to run the trains. The 1997 Conservative election manifesto promised that privatisation would bring in funds to modernise the network within five years. To compete with this the Labour manifesto proposed its own version, the PPP. Following a Labour victory the incoming government appointed Price Waterhouse accountants to provide financial advice on how to impose PPP’s on the Tube. However resistance to the part privatisation grew with RMT general secretary Jimmy Knapp giving evidence to a House of Commons committee opposing the moves. On June 15 1998 RMT held the first of a number of 48-hour Tube strikes to demand no compulsory redundancies, and over safety. Resistance continued after the former Labour MP Ken Livingstone, running as an independent, was elected as the first Mayor of London on May 4 2000 on a platform of opposing PPP as it would fragment management and operational structures. After the Hatfield rail accident he also supported a motion by the London Labour Party calling on the government to abandon its plans for the PPP on safety grounds. Nevertheless in May 2001 Tube Lines was announced as the preferred bidder for Infraco JNP (the Jubilee, Northern and Piccadilly Lines) and Metronet the preferred bidder for Infraco BCV (the Bakerloo, Circle and District Lines). On July 30 2001 Mr Justice Sullivan dismissed an application by Transport for London for a judicial review of the decision by LUL and London Regional Transport to enter into the PPP. TfL had submitted that the PPP contracts, under which it would be bound for 30 years, would make it impossible to implement the transport strategy formulated by the new mayor. Despite reports of financial problems at Amey, part of the Tube Lines consortium, Tube Lines sealed the contract to upgrade the Jubilee, Northern and Piccadilly lines and responsibility for the JNP infraco in December 2002. The final stage of the PPP was completed on April 2003 when Metronet signed the 30- year contract with LUL for the upgrade of the BCV and the Sub Surface Lines (SSL). The Public Accounts Committee consequently published a report on the PPP in March 2005 that was heavily critical of how the PPP had been put together. These concerns centred on its complexity – the PPP contracts comprised 135 separate contract documents with more than 2,800 pages of contract terms – as well as safety implications, high costs, unambitious targets and high profits for the consortiums with very little risk involved. Chancellor of the Exchequer Gordon Brown ignored the warnings and pushed through the contracts because he did not want the much-needed LUL upgrade on the government’s balance sheets. However, by 2007 Metronet went into administration and Transport for London took over its contracts. In 2009 Tube Lines too had a funding shortfall and requested more public money and in May 2010 TfL had bought out Tube Lines. Last month Transport for London finally announced that it would bring Tube Lines maintenance work on the Jubilee, Northern and Piccadilly lines back in-house by 2017 to finally end the chaos caused by the PPP. THE SORRY HISTORY OF PPP How RMT News saw PPP