Adjudicator dismisses argument by Bechtel-Ferrovial JV that upgrade delays were down to contract changes by London Underground
Tube Lines has lost a £327m claim against Transport for London on its work upgrading London Underground lines.
The decision will put the Bechtel-Ferrovial joint venture, which owns the concession to upgrade the Jubilee, Northern and Piccadilly lines for Transport for London, under increasing financial pressure.
The adjudicator in the dispute “"dismissed in its entirety" the argument by Tube Lines that delays to the upgrades of the Northern and Jubilee lines were the fault of London Underground for changing contract terms.
LU is levying huge fines against Tube Lines for missing its deadlines.
As well as dismissing the claim, the adjudicator also told Tube Lines to pay LU’s legal costs.
The decision has significance for the ongoing dispute between LU and Tube Lines over the cost of the next phase of the upgrade works.
In a draft determination before Christmas, the arbiter decided that LU should pay Tube Lines £4.4bn for the work between 2010 and 2017, £1.3bn less than Tube Lines was asking for.
Tube Lines need to stop making further spurious claims for additional fare payers' and taxpayers' money and get on with the job in hand
Richard Parry, LU managing director
However, that determination said that Tube Lines could seek to gain more money through continuing to pursue claims for costs against LU, a strategy which now looks unlikely to succeed.
Dean Finch, outgoing Tube Lines chief executive, has admitted that if enacted the draft determination could come close to bankrupting the company.
LU welcomed today’s decision.
Richard Parry, LU managing director, said: "This ruling proves that, contrary to Tube Lines’ claims, London Underground is a capable, disciplined and responsible commercial partner.
"We are successfully delivering substantial upgrades to the Underground by working directly with private sector contractors on those parts of the network where there is no PPP arrangement, by contrast with the Jubilee line failure, wholly attributed to Tube Lines by this adjudication.
“Tube Lines need to stop making further spurious claims for additional fare payers' and taxpayers' money and get on with the job in hand."