Metronet
Encyclopedia
Metronet Rail was one of two companies (the other being Tube Lines
Ltd) in a public-private partnership
with London Underground
.
Metronet was responsible for the maintenance, renewal, and upgrade of the infrastructure on nine London Underground
lines from 2003 to 2008. This included track, trains, signals, civil work and stations. From 18 July 2007 to 26 May 2008, the company was in administration
and had to be bailed out by the government. On 27 May 2008, the company responsibilities were transferred back into public ownership under the authority of Transport for London
. In June 2009 the National Audit Office estimated that the failure of the Metronet PPP
contract cost the taxpayer up to £410m adding that "most of the blame for Metronet's collapse lay with the consortium itself." The administration complete, the joint administrators petitioned the High Court of Justice
for the winding-up of the company on the 3 November 2009, the petition to be heard on the 10 December 2009.
Before Metronet Rail entered PPP Administration, it had five shareholders:
The Metronet Rail brand consisted of separate trading companies, Metronet Rail BCV Ltd and Metronet Rail SSL Ltd : 'BCV' standing for Bakerloo,Central & Victoria lines and 'SSL' for Sub-surface Lines (Circle, District, East London, Hammersmith+City & Metropolitan). Following administration these were transferred temporarily to new companies named LUL Nominee BCV Ltd and LUL Nominee SSL Ltd.
From April 2003 to May 2008, London Underground was operated as a Public-Private Partnership
(PPP), where the infrastructure and support services were maintained by private companies but the London Underground was still publicly owned and operated by Transport for London
(TfL). Metronet Rail had been the successful bidder for the two 30-year contracts for the following tube and sub-surface lines:
BCV (tube) lines contract
SSL (sub-surface) lines contract
Under the terms of the contracts, Metronet Rail agreed to provide London Underground (LU) with trains, stations, and related infrastructure to the standards and performance levels required to give the travelling public a reliable service in a safe, efficient, and economic manner. LU paid the Metronet Rail consortium an infrastructure service charge (ISC) - a monthly payment increased or abated to reflect the network's performance. Revenue to the consortium was reduced if service fell below benchmark levels and deductions suffered for poor performance were at twice the rate of the increase in revenue for improved performance.
Metronet Rail had contracted to modernise and refurbish 150 stations by 2012, with £17 billion invested over the course of the 30-year contract. Within their maintenance and capital-project management remit they had 347 trains, over 471 miles (758 km) of track, 155 stations, 77 miles (123.9 km) of deep tubes, and over 2000 points, crossings, and bridges.
In November 2006, Metronet were heavily criticised by the PPP arbiter, Chris Bolt, over their performance from 2003 to 2006. His analysis included criticism that Metronet had not performed in an economic or efficient manner, and had failed to follow good industry practice.
The remaining London Underground lines, (Jubilee
, Northern
and Piccadilly
) remained under a PPP arrangement with Tube Lines
until May 2010 when it was announced that Transport for London
would buy out the Tube Lines consortium.
, the other PPP company, had brought in almost all of its works on time and on budget.
On 18 July 2007, an administration order was made. The Court appointed Ernst & Young LLP in the persons of Alan Robert Bloom, Roy Bailey, Margaret Elizabeth Mills and Stephen John Harris as special PPP administrators. To enable the business activities to be kept going it was subsequently bailed out by the UK Government at a cost of £2 billion. On 27 May 2008, Metronet came out of administration and the contracts and employees transferred to Transport for London
under two new temporary companies, LUL Nominee BCV Ltd and LUL Nominee SSL Ltd.
On 3 December 2009, the PPP business of former Metronet Rail became an integral part of London Underground.
In 2010 the House of Commons' Public Accounts Committee reprimanded the Department for Transport
for its failure to heed National Audit Office
warnings about the company's management.
By the beginning of 2011 with the formal liquidation process having been completed, the Metronet brand and group of companies had ceased to exist.
Tube Lines
Tube Lines Limited, initially known as 'Infraco JNP', has been a wholly owned subsidiary of Transport for London since May 2010. Tube Lines is an asset-management company responsible for the maintenance, renewal and upgrade of the infrastructure, including track, trains, signals, civil work and...
Ltd) in a public-private partnership
Public-private partnership
Public–private partnership describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies...
with London Underground
London Underground
The London Underground is a rapid transit system serving a large part of Greater London and some parts of Buckinghamshire, Hertfordshire and Essex in England...
.
Metronet was responsible for the maintenance, renewal, and upgrade of the infrastructure on nine London Underground
London Underground
The London Underground is a rapid transit system serving a large part of Greater London and some parts of Buckinghamshire, Hertfordshire and Essex in England...
lines from 2003 to 2008. This included track, trains, signals, civil work and stations. From 18 July 2007 to 26 May 2008, the company was in administration
Administration (insolvency)
As a legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an alternative to liquidation – is often known as going...
and had to be bailed out by the government. On 27 May 2008, the company responsibilities were transferred back into public ownership under the authority of Transport for London
Transport for London
Transport for London is the local government body responsible for most aspects of the transport system in Greater London in England. Its role is to implement the transport strategy and to manage transport services across London...
. In June 2009 the National Audit Office estimated that the failure of the Metronet PPP
Public-private partnership
Public–private partnership describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies...
contract cost the taxpayer up to £410m adding that "most of the blame for Metronet's collapse lay with the consortium itself." The administration complete, the joint administrators petitioned the High Court of Justice
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
for the winding-up of the company on the 3 November 2009, the petition to be heard on the 10 December 2009.
Before Metronet Rail entered PPP Administration, it had five shareholders:
- AtkinsWS Atkins PLCWS Atkins plc is a multinational engineering, design, planning, project management and consulting services company headquartered in Epsom, United Kingdom...
, - Balfour BeattyBalfour BeattyBalfour Beatty plc is a British construction, engineering, military housing, rail and investment services company. It is one of the largest construction companies in the UK, and the 15th largest in the world...
, - Bombardier,
- EDF EnergyEDF EnergyEDF Energy is an integrated energy company in the United Kingdom, with operations spanning electricity generation and the sale of gas and electricity to homes and businesses throughout the United Kingdom...
, and - Thames WaterThames WaterThames Water Utilities Ltd, known as Thames Water, is the private utility company responsible for the public water supply and waste water treatment in large parts of Greater London, the Thames Valley, Surrey, Gloucestershire, Wiltshire, Kent, and some other areas of in the United Kingdom...
.
The Metronet Rail brand consisted of separate trading companies, Metronet Rail BCV Ltd and Metronet Rail SSL Ltd : 'BCV' standing for Bakerloo,Central & Victoria lines and 'SSL' for Sub-surface Lines (Circle, District, East London, Hammersmith+City & Metropolitan). Following administration these were transferred temporarily to new companies named LUL Nominee BCV Ltd and LUL Nominee SSL Ltd.
From April 2003 to May 2008, London Underground was operated as a Public-Private Partnership
Public-private partnership
Public–private partnership describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies...
(PPP), where the infrastructure and support services were maintained by private companies but the London Underground was still publicly owned and operated by Transport for London
Transport for London
Transport for London is the local government body responsible for most aspects of the transport system in Greater London in England. Its role is to implement the transport strategy and to manage transport services across London...
(TfL). Metronet Rail had been the successful bidder for the two 30-year contracts for the following tube and sub-surface lines:
BCV (tube) lines contract
- BakerlooBakerloo LineThe Bakerloo line is a line of the London Underground, coloured brown on the Tube map. It runs partly on the surface and partly at deep level, from Elephant and Castle in the south-east to Harrow & Wealdstone in the north-west of London. The line serves 25 stations, of which 15 are underground...
- CentralCentral LineThe Central line is a London Underground line, coloured red on the tube map. It is a deep-level "tube" line, running east-west across London, and, at , has the greatest total length of track of any line on the Underground. Of the 49 stations served, 20 are below ground...
- VictoriaVictoria LineThe Victoria line is a deep-level London Underground line running from the south to the north-east of London. It is coloured light blue on the Tube map...
- Waterloo & CityWaterloo & City LineThe Waterloo & City line is a short underground railway line in London, which was formally opened on 11 July 1898. It has only two stations, Waterloo and Bank...
SSL (sub-surface) lines contract
- Circle
- DistrictDistrict LineThe District line is a line of the London Underground, coloured green on the Tube map. It is a "sub-surface" line, running through the central area in shallow cut-and-cover tunnels. It is the busiest of the sub-surface lines. Out of the 60 stations served, 25 are underground...
- East LondonEast London LineThe East London Line is a London Overground line which runs north to south through the East End, Docklands and South areas of London.Built in 1869 by the East London Railway Company, which reused the Thames Tunnel, originally intended for horse-drawn carriages, the line became part of the London...
- Hammersmith & CityHammersmith & City LineThe Hammersmith & City line is a subsurface London Underground line. It connects Hammersmith in the west with Barking in the east, running through the northern part of central London. It is coloured salmon pink on the Tube map...
- MetropolitanMetropolitan LineThe Metropolitan line is part of the London Underground. It is coloured in Transport for London's Corporate Magenta on the Tube map and in other branding. It was the first underground railway in the world, opening as the Metropolitan Railway on 10 January 1863...
Under the terms of the contracts, Metronet Rail agreed to provide London Underground (LU) with trains, stations, and related infrastructure to the standards and performance levels required to give the travelling public a reliable service in a safe, efficient, and economic manner. LU paid the Metronet Rail consortium an infrastructure service charge (ISC) - a monthly payment increased or abated to reflect the network's performance. Revenue to the consortium was reduced if service fell below benchmark levels and deductions suffered for poor performance were at twice the rate of the increase in revenue for improved performance.
Metronet Rail had contracted to modernise and refurbish 150 stations by 2012, with £17 billion invested over the course of the 30-year contract. Within their maintenance and capital-project management remit they had 347 trains, over 471 miles (758 km) of track, 155 stations, 77 miles (123.9 km) of deep tubes, and over 2000 points, crossings, and bridges.
In November 2006, Metronet were heavily criticised by the PPP arbiter, Chris Bolt, over their performance from 2003 to 2006. His analysis included criticism that Metronet had not performed in an economic or efficient manner, and had failed to follow good industry practice.
The remaining London Underground lines, (Jubilee
Jubilee Line
The Jubilee line is a line on the London Underground , in the United Kingdom. It was built in two major sections—initially to Charing Cross, in central London, and later extended, in 1999, to Stratford, in east London. The later stations are larger and have special safety features, both aspects...
, Northern
Northern Line
The Northern line is a London Underground line. It is coloured black on the Tube map.For most of its length it is a deep-level tube line. The line carries 206,734,000 passengers per year. This is the highest number of any line on the London Underground system, but the Northern line is unique in...
and Piccadilly
Piccadilly Line
The Piccadilly line is a line of the London Underground, coloured dark blue on the Tube map. It is the fifth busiest line on the Underground network judged by the number of passengers transported per year. It is mainly a deep-level line, running from the north to the west of London via Zone 1, with...
) remained under a PPP arrangement with Tube Lines
Tube Lines
Tube Lines Limited, initially known as 'Infraco JNP', has been a wholly owned subsidiary of Transport for London since May 2010. Tube Lines is an asset-management company responsible for the maintenance, renewal and upgrade of the infrastructure, including track, trains, signals, civil work and...
until May 2010 when it was announced that Transport for London
Transport for London
Transport for London is the local government body responsible for most aspects of the transport system in Greater London in England. Its role is to implement the transport strategy and to manage transport services across London...
would buy out the Tube Lines consortium.
Financial crisis
On 17 July 2007 it was reported that Metronet was "teetering on the brink of administration". The situation arose because it had received only £121m out of the £551m it needed to cover cost over-runs. By contrast, Tube LinesTube Lines
Tube Lines Limited, initially known as 'Infraco JNP', has been a wholly owned subsidiary of Transport for London since May 2010. Tube Lines is an asset-management company responsible for the maintenance, renewal and upgrade of the infrastructure, including track, trains, signals, civil work and...
, the other PPP company, had brought in almost all of its works on time and on budget.
On 18 July 2007, an administration order was made. The Court appointed Ernst & Young LLP in the persons of Alan Robert Bloom, Roy Bailey, Margaret Elizabeth Mills and Stephen John Harris as special PPP administrators. To enable the business activities to be kept going it was subsequently bailed out by the UK Government at a cost of £2 billion. On 27 May 2008, Metronet came out of administration and the contracts and employees transferred to Transport for London
Transport for London
Transport for London is the local government body responsible for most aspects of the transport system in Greater London in England. Its role is to implement the transport strategy and to manage transport services across London...
under two new temporary companies, LUL Nominee BCV Ltd and LUL Nominee SSL Ltd.
On 3 December 2009, the PPP business of former Metronet Rail became an integral part of London Underground.
In 2010 the House of Commons' Public Accounts Committee reprimanded the Department for Transport
Department for Transport
In the United Kingdom, the Department for Transport is the government department responsible for the English transport network and a limited number of transport matters in Scotland, Wales and Northern Ireland which are not devolved...
for its failure to heed National Audit Office
National Audit Office (United Kingdom)
The National Audit Office is an independent Parliamentary body in the United Kingdom which is responsible for auditing central government departments, government agencies and non-departmental public bodies...
warnings about the company's management.
By the beginning of 2011 with the formal liquidation process having been completed, the Metronet brand and group of companies had ceased to exist.