Mad PPP deal poured money into fat cats' pockets

3.23.00pm BST (GMT +0100) Thu 17th Jun 2004

Lynne Featherstone, transport spokesperson, today hit out at the Government's waste of taxpayers' money in the wake of a National Audit Office report detailing £455 million paid in 'expenses' for setting up the Tube PPP deal:

"Liberal Democrats warned that Labour's mad PPP for the Tube would pour taxpayers' money into fat cats' pockets. Now the National Audit Office spells it out: PPP was, in their words, 'costly for all parties involved'.

"Our own research shows that £455M could have bought:

· 40 new trains

· renewed 60 kilometres of Tube track

· provided 25 new wheelchair lifts

· and replaced the vital signalling systems at 12 Tube junctions.

"Surely upgrading the network would have been much better value than lining the pockets of law firms, consultants and giving sweeteners to private companies?"

She added: "The NAO report shows the unnecessary costs are even higher. The borrowing involved comes at some £450 million more than direct Government borrowing. The terms of the deals changed during the long drawn-out negotiations adding £590 million to the 30-year cost of the deals.

"The Labour Mayor of London has pledged to spend £1 billion each year on the Tube. Most of the costs for the first two years could have been covered already if Labour had not gone in for PPP."

ENDS

Notes to editors:

1. National Audit Office report London Underground PPP: Were they good deals? published 17 June 2004. Executive Summary para 11 and 12 detail the costs of the PPPs.

2. Liberal Democrat research demonstrates, as an illustration, the following uses for £455 million of taxpayers' money if it had been spent on upgrading the London Underground network. Indicative costings were obtained through Transport for London Public Affairs:

Signalling: replace signalling system at 12 Tube junctions £108M

Trains: supply 40 new six-car trains £220M

Track: renew 60 km of Tube track £102M

Wheelchair access: provide 25 new wheelchair lifts £ 25M

TOTAL: £455 M