PPP costs

Meeting: 
MQT on 2015-09-16
Session date: 
September 16, 2015
Reference: 
2015/2669
Question By: 
Darren Johnson
Organisation: 
City Hall Greens
Asked Of: 
The Mayor
Category: 

Question

Back in May 2010 you said Transport for London had saved "hundreds of millions of pounds" by bringing the discredited Public Private Partnership (PPP) Tube deal back in house. How much does TfL estimate this crucial decision will have saved Londoners by May 2016?

Answer

Answer for PPP costs

Answer for PPP costs

Answered By: 
The Mayor

Taking the Public Private Partnership (PPP) contracts back in house into an integrated project delivery and operational railway environment, has undoubtedly saved Londoners many millions of pounds.

Savings from the integration of Metronet and Tube Lines into London Underground (LU) have been embedded in successive TfL Business Plans, and have been delivered. Since 2010 TfL has identified additional efficiencies from business areas brought in house, which have been reported as part of the Efficiencies programme.

Taking the flawed PPP contracts back in house has also allowed LU to successfully modernise the Victoria, Jubilee and more recently the Northern line. Furthermore, the world has changed in ways not anticipated in 2010 enabling TfL to avoid costs not anticipated in 2010 - for example by avoiding payments including profit margins to the Infracos over the introduction of Night Tube.

It is estimated that over £0.5bn has been realised so far from the integration. However, it should be born in mind that changes in external factors such as interest rates will have impacted on the scale of savings made.