Paymaster general Geoffrey Robinson has been advised by businessmen that the London Underground's investment backlo...
Paymaster general Geoffrey Robinson has been advised by businessmen that the London Underground's investment backlog of£1bn could be cleared by inviting the private sector to take over LU's tracks, tunnels and stations on leases of up to 30 years. The Financial Times (p1) reports that the plan could leave the operation of train services in the hands of the public sector, allowing the government to meet its election pledge to avoid 'wholesale privatisation' of the network.
The businessmen on the panel are Ed Wallis, chairman of PowerGen, Malcolm Bates, chair of Pearl Assurance, John Roques, senior partner of Deloitte & Touche, and Graham Hearne, chair of Enterprise Oil. They suggest that the LU infrastructure, including rolling stock, should be auctioned off in two or three parts to the private sector on long leases. The infrastructure companies would recoup the necessary investment of between£6bn and£8bn over the next 15 years from access charges paid by the operating company.
Deputy prime minister John Prescott has been advised the LU will be able to operate without public subsidy after 2000. Other options that could be resurrected are: keeping the LU integrated and possibly floating it, or splitting it into equal chunks with each owning both network and operator.