TRANSPORT FORUM - PART PRIVATISATION OF THE DISTRICT LINE

2nd November 2001

Concern that the government is to impose its proposals for the part privatisation of London Underground in spite of the lessons learned from the collapse of Railtrack as a privately run rail management company were expressed by leading transport experts at a packed debate staged by the Wimbledon Civic Forum.

Susan Kramer, the transport adviser to mayor Ken Livingstone and LU’s Underground supremo Bob Kiley, said the government would be tempted to impose its unpopular public-private partnership proposals which would hand over LU maintenance to three private consortia, because they could not afford fresh humiliations after the collapse of Railtrack.

“I am opposed to PPP not just on ideological grounds but because it does not provide value for money and creates conflicting priorities” she said. “I had never understood why the government had not backed off with the arrival from New York of Bob Kiley who was not affiliated to anybody and provided a face saving opportunity for the government which they did not take.”

If the scheme went ahead, she warned, it would take another five to seven years before the cost of the proposed private contracts were audited “and by then we will have hit the buffers and given away the shop” she said.

Author and journalist Christian Wolmar denounced PPP as “a crazy scheme” requiring 135 volumes containing two million words to specify how it would work. “It was flawed from the outset. The overground railways tried to run such contracts and it did not work. Yet I believe the collapse of Railtrack has strengthened the government’s resolve because if it pulls out of PPP now it will so mess up City confidence that investors will not touch anything to do with railways.”

Chris Austin, external relations director of the Strategic Rail Authority, said there were lessons to be learned from the collapse of Railtrack and that public funding was needed for the Underground which was not competing with hospitals, roads and schools. But the government’s proposals for a new not-for-profit company to replace Railtrack could not be ignored.

Adrian Lyons, director general of the Railway Forum representing private rail operators said that LU had been forced to sign “A Faustian deal with the Treasury”. They were faced with Hobson’s choices but the central issue was whether the future viability of the Underground system had been addressed and he urged that “some compromise would have to be achieved.”

In a floor vote, the Transport Forum audience unanimously rejected the PPP proposals in favour of the Livingstone-Kiley proposal for the a public bonds issue to fund the future of the Underground..