Tube operator warns it will seek judicial review if PPP arbiter stands by draft decision
Transport for London is calling on the PPP arbiter to review the draft decision that it must raise the additional £460m required to fund the next 7.5 years of Tube Lines' contract.
The call was made as the Mayor of London, TfL and London Underground delivered their representations to the arbiter, Chris Bolt, in response to his draft directions on PPP finance.
TfL also wants Tube Lines and shareholders Ferrovial and Bechtel to demonstrate that its delivery plans for work over the second term of the contract are robust and that the company is creditworthy.
Mike Brown, managing director of LU, said: "It is essential that Tube Lines and its shareholders, Ferrovial and Bechtel, are now called upon to set out in full their plan to deliver the full scope of works for £4.46bn, fully £1.3bn less than the final cost they claimed.
“Also, that this plan is put to the test that would be applied by potential lenders, as the PPP always envisaged.”
In the representations TfL has made it clear that if the directions for the financing aren’t reviewed that it would leave the tube operator with “no alternative but judicial review”.
On March 10 the PPP arbiter delivered his final determinations on cost, setting the amount Tube Lines will receive at £4.46bn.
This is £460m higher than the £4bn TfL has budgeted for Tube Lines.