Company in dispute with London Underground over cost overruns expected to reach between £750m and £1.2bn by 2010

Metronet, the PPP company responsible for the maintenance and upgrade of two-thirds of London Underground, is trying to reduce the scope of the work it undertakes.

Metronet workers

Metronet is embroiled in a dispute with London Underground over cost overruns that are expected to reach between £750m and £1.2bn by 2010. It is trying to thrash out ways to avoid such overruns in the future.

A senior source close to Metronet said: “Metronet could reduce the scope of work to make it an affordable and fundable package.”

He added that “Metronet could become insolvent”, but said at the moment the company was committed to making the station refurbishment programme work.

The dispute centres on Metronet’s claims that the cost overruns were caused by a huge increase in the scope of work on station upgrades compared with London Underground’s original brief.

Options for scaling back the work include refurbishing only areas visited by the public.

For example, Baker Street station, which is to undergo a £100m upgrade, includes about 400 backroom offices. The idea would be to upgrade only those offices that face public areas.

An official spokesperson for Metronet said: “We’re looking at ways to constrain costs on future station upgrades. Those discussions are continuing.”

However, a London Underground spokesperson said: “We wouldn’t accept any descoping. This is a long-term process.”

On the issue of the cost overruns, he added: “London Underground is adamant that it will not be paying any of those costs. Any cost overruns are due to Metronet’s inefficiency and poor management and planning.”

Metronet is expected to call an extraordinary review by August.