The government is keen for all three Tube Lines contracts to be signed simultaneously. However, Metronet this week confirmed there were delays to the completion of its two deals for the remaining two-thirds of the Tube, as predicted in Building last month (18 October, page 11). This could mean it will not sign until the new year.
A Tube Lines spokesperson said it was looking to reach financial close on its deal for the Jubilee, Northern and Piccadilly lines over the next month.
The spokesperson said: "We are very, very confident of doing the deal soon. We are not setting dates, but it's weeks rather months."
The spokesperson said it would be up to London Underground to decide if the three completions were to be split, and added: "They will have to take a view as to whether that can take place."
Metronet confirmed this week that it had yet to finalise funding for its two contracts. The consortium, which includes contractor Balfour Beatty and consultant Atkins, is seeking £1bn in bonds, £1bn in bank loans and £600m from the European Investment Bank. The group said it was confident financing would be arranged but declined to say when the deals would be signed. It is set to take over two sets of lines: the Bakerloo, Central and Victoria lines, and the Hammersmith & City, Metropolitan, District and Circle lines.
n More than half of PFI deals have no contractual arrangements to share gains from refinancing, according to a report by government watchdog the National Audit Office. Refinancing refers to when PFI consortiums negotiate more favourable terms with lenders as project risks diminish.
The report called for procurement body the Office of Government Commerce to make sure government departments are fully aware of refinancing issues. Auditor general Sir John Bourn praised new OGC refinancing arrangements, where gains are split 50:50 between contractors and the public sector. But he added: "This is a complex area and departments will need to become more expert in this topic to enable them to manage the new arrangements effectively."