A preliminary assessment of the cost of improvements to three London Underground lines, to be carried out between 2010 and 2017, reveals a huge gap between the proposed budget and projected costs. A price-tag of £5.1 billion–£5.5 billion has been suggested by the Public-Private Partnership (PPP) arbiter, Chris Bolt, which is a compromise figure between the £4.1 billion cost hoped for by Transport for London (TfL) and the £7.2 billion estimated by Tube Lines, the consortium of companies that will carry out the work.

The extra £1 billion–£1.4 billion needed to be found by TfL for the upgrade is the chief concern for Londoners, who are already facing a 6% fares increase and who were against the unwieldy PPP scheme from the start. In 2007, Metronet, the consortium responsible for work on the rest of the Tube network, went bankrupt when its costs overran by some £1.7 billion. While TfL was forced by the government to repay this amount to Metronet’s banks, it was reiumbursed by the Treasury, a move which TfL says it expects to happen again, especially in view of the fact that the PPP was foisted on London by the government, even though city officials were against it.

However, given the economic climate, TfL privately admits that a billion-pound reimbursement by an already cash-strapped Treasury is unlikely, and therefore other alternatives need to be considered. The option of reducing the scope of the contract with Tube Lines has been categorically rejected by London Underground’s boss, Tim O’Toole, who has argued that the steady rise in passenger numbers flatly precludes any scaling back in the work. This view is supported by Stephen Glaister, a former member of TfL’s board and now a transport expert at Imperial College London, who concurs with O’Toole that any cuts in the proposed work could jeopardize the running of the entire Tube network.

With no room for cutting back on the scope of the work, additional funds will have to be sought. A further hike in fares, besides being very unpopular with Londoners, would not be sufficient to raise these funds, which only leaves the option of taking cash from other projects to channel into this one. One such possible target is Crossrail, a scheme (first mooted in 1989) for a new rail route to link the east and west of London at a cost of £16 billion. Though London’s mayor, Boris Johnson, is against this, maintaining that Crossrail is an equally important priority for the city, some analysts see this as a viable option for bridging the funding gap, pointing out that the business tax designed to fund Crossrail could be diverted for a few years to help pay for the Underground’s upgrade.

Whichever solution is found, the brunt of the high costs, funding complexities, and inevitable delays involved in improvements to the Tube network will no doubt fall on the long-suffering users of the capital’s overpriced and underfunded public transport system.

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