EIB denies £5bn role in Tube PPP

8 Mar 01
Reports that the European Investment Bank is ready to inject £5bn into the government's ailing public-private partnership for the Tube were denied this week.

09 March 2001

Officials from both the EIB and Transport for London claimed to know nothing of the reports of a cash injection that crucially would allow the Underground to remain under public control.

'There's no basis to the story at all,' said Adam McDonaugh, an EIB spokesman. 'We haven't spoken to Transport for London.'

There was a similar denial at TfL.

However, the EIB, which is funded by the 15 European Union member states, is still in discussions with PPP contract bidders to help fund each of the four consortiums' bids by up to £300m each.

This money could be crucial, as the government will have to pay compensation to the private sector if it has to pull the plug on the PPP. This bill could top £120m, according to some estimates.

In another turbulent week in the lengthening Tube saga, London Mayor Ken Livingstone confirmed on March 6 that he would allow transport supremo Bob Kiley to begin action to undertake a judicial review of the PPP.

But the scheme could be scuppered by the government's own claim that it would not proceed if the PPP were found to be unsafe. A leaked Health and Safety Executive report this week found 69 outstanding safety issues.

There could also be movement on the government's other condition for abandoning the PPP, the public sector comparator.

A major critic of the PPP, Professor Stephen Glaister of Imperial College, has written to the National Audit Office urging them to carry out a study to see if the public sector could provide a cheaper funding alternative for the Tube than business.


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