Metronet and London Underground (Supplementary) [11]

Session date: 
May 23, 2007
Question By: 
Peter Hulme Cross
Organisation: 
One London Party
Asked Of: 
The Mayor

Question

OK. One more point, and that is Metronet employ about 6,000 people in their staff - both frontline and back office - most of whom would say that they were Londoners. The constant criticism of Metronet that emanates from you and some other people I would suggest is undermining the morale of the company and making matters worse. Their staff try extremely hard, and work extremely hard, to keep London Underground going. Yet they are criticised unmercifully and constantly. That is creating a real morale problem for Metronet.

Answer

Answer for Metronet and London Underground (Supplementary) [11]

Answer for Metronet and London Underground (Supplementary) [11]

Answered By: 
The Mayor

Let me be absolutely clear. No one is criticising the poor people working on the line to get the trains out in the morning. We are criticising the management. Metronet was offered contracts which had a calculated rate of return of about 25%, which meant anyone buying the shares got their full return within three years. Everything after that for the 30 years, pure profit. It is breathtaking that with contracts that generous, they are now saying they have lost £750 million. The reality is if the Arbiter was to rule the bulk of that money falls on Metronet, it is a call on their shareholders, who clearly at that stage will go into liquidation and walk away. At that stage we will take over the running of the Metronet operation, we will take back the staff in-house, and we will start awarding contracts without the vast profit margins, clear concise contracts, to deliver the upgrades we have improved. However, we are not going to give Metronet more because, frankly, I have no confidence of their ability if we gave them the money. Even if we had this pot that was not going to be a painful fare increase or Council Tax increase, what guarantee have we got they will not actually mismanage that as well?