The PPP Agreements

London Underground Limited entered into three separate Public Private Partnership (PPP) Agreements, with Tube Lines in December 2002 and with Metronet (two separate agreements) in April 2003. Under these Agreements, which cover a 30 year period, three separate companies ('Infracos') are responsible for the maintenance, renewal and upgrading of specific parts of London Underground's infrastructure.  London Underground, which is an operating subsidiary of Transport for London, retains responsibility for delivering services to customers.

On 18 July 2007, Metronet Rail BCV Limited and Metronet Rail SSL Limited, entered PPP Administration, exiting on 27 May 2008 having been transferred to two new companies within Transport for London.  The two Metronet PPP Agreements remain in place pending agreement of a permanent structure for the Metronet Infracos.

What the PPP delivers

The programme of works delivered under the PPP Agreements is long term, scheduled to be carried out over 30 years. In this period, the Infracos will deliver:

• line upgrades involving the provision of new trains and/or signalling on every line (except the Central line where existing trains and signalling may not need to be replaced in the life of the PPP);
• an extensive station modernisation and refurbishment programme; and
• improved understanding of the condition of all of London Underground's assets.

Line upgrades

All three of the Infracos are in the process of delivering line upgrades that are scheduled to be completed in the second Review Period.  A large amount of the engineering and construction work has already taken place, as the projects take up to eight years to complete.  Line upgrades deliver significant improvements in Capability adding between 19% and 35% to the existing capacity of the lines being upgraded.

Details of the line upgrades currently underway and those planned to commence in the second Review Period are provided below:

Improvements already delivered are:

• Central Line and Victoria Line initial journey time improvements  in 2006.
• Waterloo and City Line upgrade, completed in 2007, included the replacement of the entire track and refurbishments to the trains.

Station works

A large proportion of the network's stations have been the subject of modernisation or refurbishment in the first Review Period as part of the PPP Contracts.  The chart below indicates the number of modernisations and refurbishments currently scheduled to take place in the first Review Period.

Tube Lines has delivered all of the station works required by its PPP Agreement to date.  In the case of Metronet, Administration affected delivery and a number of stations originally scheduled to be improved will not be completed by the end of the Review Period. This is reflected in the above chart.  Plans for 2010 and beyond are subject to change as part of the Periodic Review of the PPP agreements.

Improving asset knowledge and asset condition

During the first Review Period, the Infraco's obligations have included the inspection and assessment of the condition of the assets for which it is responsible.  At  transfer, there were a large number of trackside assets, such as embankments, bridges and drains, of which the detailed condition was unknown ('grey assets').  After assessing and cataloguing the condition of these and the work required on them, the Infracos have developed a bank of work to bring all its assets, including grey assets,  to a target level of condition by the end of each Review Period.

Other works

Under the PPP Agreements London Underground retained 'specified rights' to require the Infracos to undertake works in certain areas that could not be fully specified at transfer and therefore were not generally priced as part of the bidding process. In the case of Tube Lines a number of specified rights have been exercised by London Underground and completed by Tube Lines, including the delivery of an extra trailer car for every Jubilee line train, improvements at Wembley Park station and the delivery of works in relation to the extension of the Piccadilly Line to Heathrow Terminal 5. A number of specified rights have also been exercised for Metronet SSL, including the installation of air conditioning on the sub-surface lines and the increase of the Circle line to a seven car service both as part of the line upgrade.

In addition, Infracos have been undertaking congestion relief and/or step free access programmes at a number of stations. Where possible these works have been completed as part of station modernisations and refurbishment works in order to minimise disruption. The number of stations with step free access was 54 at the end of 2008.

Performance regimes

The PPP performance regimes incentivise the Infracos who earn performance revenues (or suffer abatements) to improve both the capability and day-to-day reliability of the Underground service which is measured by the Capability and Availability metrics and the quality of the travelling environment. 

At an Infraco level there has been a marked improvement in the three month rolling average Availability level since the PPP contracts were let with a 35% improvement network wide:

Periodic Review

The first Review Period of 7½ years runs until 2010.  In this period the Infracos are focussing on station works, investing in track and civils infrastructure and the development of line upgrades which are long term projects that generally span the first and second Review Periods. 

The delivery obligations of the Infracos in the second Review Period will be the subject of Restated Terms which London Underground issued for Tube Lines on 8 December 2008 and is scheduled to issue for Metronet by 3 April 2009.