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Last night I dreamt I went to Manderley again Less obscure? Du Maurier Rebecca
Manderly burnt down five years ago when Railtrack went into administration. etc
‘“I have been here before,' I said; I had been there before; first with Tom Winsor more than five years ago on a stormy day in October…
Taking a butcher's knife to Waugh's prose rams home the point: we have been here before. Yes, the administrators have been called in again, this time to floundering Metronet Rail, the consortium charged with modernising two thirds of the London Underground network under the Public Private Partnership.
And if the last time round is anything to go by, expect a tragedy to unfold as the administrators have a high time writing cheques with other people's money: for that is what happened at Railtrack. They weren't useful cheques, building in extra capacity and easing bottlenecks (all enhancement was put on hold for the duration). No, they were wasteful cheques, covering the administrators' backs and making life simple for them.
As the Rail Regulator at the time of the Railtrack debacle, Tom Winsor, never ceases to remind us, without the discipline of equity at the Black Tower the checks and balances were swept away. The engineering barons, who had been smarting ever since Bob Reid 1 had reined in their fiefdoms, sniffed a power vacuum and quickly asserted themselves. All that any spending submission had to do was mention a safety angle and the administrators' signatures on the cheque were instantly forthcoming.
Thus were the frogs boiled: infrastructure costs quietly inflated without anyone noticing until it was too late. And of course it is much easier to tempt junkies into heroin than to wean them off it: once the railways had got used to spending that money, it was very difficult to cure them of the habit. Hence we have ended up with a national railway that costs the taxpayer six times more than it did in the days of British Rail.
Will the same thing happen at Metronet? Will the mere whisper of Hammersmith, or Chancery Lane, get the signature on the cheque? We will have to wait and see, but as at Railtrack in administration, we can only expect that useful spending on continuing the upgrade of lines will suffer a hiatus.
For Londoners, indeed for the country as a whole, that would be a disaster. Because with the capital's population rising fast and the tube bursting at the seams and fai;ling with monotonous regularity, , London Underground needs extra capacity now, not tomorrow. It needs more reliability now as equipment runs well past its renew-by date as a result of the five year hiatus while then Chacellor Gordon Brown and the newly enobl4ed then special advisor Shriti Vadera spent £100 million a year for five years setting up the PPP
Metronet's rival in the PPP, Tube Lines, likes to inform us on every press release that its three lines, the Jubilee, Northern and Piccadilly, are among the busiest on the network and carry over 40% of LU's total of passengers. In that there is something to be thankful for, although it is not clear why a resident of Edgware, say, rather than Epping, should end up coming out better off from the PPP fiasco. Luckily, the Metronet routes are set to play only a marginal role in the 2012 Olympics, so hopefully we will be spared national humiliation on that front.
x-head:
What went wrong?
An interview with Tube Lines Chief Executive Terry Morgan in this issue (p43) gives a few pointers as to why Tube Lines has been successful while Metronet has sunk. Metronet began life with weak management – and although Andrew Lezala, the Bombardier man now at the helm, has had a varied career in the industry, the Metronet supertanker proved to be heading too fast towards the rocks for him to be able to turn it round in time.
It was the station modernisation programme that pierced the fateful gash in the hull, with Metronet's policy of reserving work for its shareholders the flaw in the plan. Earlier this year, Metronet began apeing Tube Lines in putting station modernisations out to competitive tender, but it was too little and too late.
Allocating the train construction work to Metronet shareholder Bombardier has not attracted the same opprobrium. By comparison with the nightmare of what can go wrong when you start ripping apart century-old buildings on which the maintenance has been neglected, assembling new trains is quite straightforward and the people in Derby know what they are doing. Doubtless their overlords in Montreal will be comforted following their loss of the £70m they put into Metronet by the substantial forward payments (rumoured to be north of £600million) which are said to have been made by Metronet for development work on the new Victoria Line and Sub Surface stock.
In a project the size of the PPP, effective project management skills are clearly essential. PPP arbiter Chris Bolt attributes Tube Lines' relative success in large measure to the project management skills of its shareholder Bechtel. This North American engineering consultancy is getting used to hauling Britain's railways out of a hole: Bechtel got the Jubilee Line extension open to the Dome in time for the millennium celebrations, it pulled the West Coast Route Modernisation out of the mire of Railtrack, and now it is helping to put the finishing touches to High Speed 1, a railway mega-project which is performing to time and budget (a novel experience in the UK).
Cynics allege that Bechtel is canny at putting itself in the best light: on WCRM for instance, it initially estimated that putting right Railtrack's excesses would put the project price tag up to more than £12billion, thus making Bechtel appear brilliant for bringing in at around £8billion. Maybe so, but JLE, WCRM and HS1 remain powerful sets of initials for any firm to have in its corporate CV.
Addressing the Greater London assembly on the day Metronet filed for administration, London mayor Ken Livingstone gestured towards the Tube Lines boss in the gallery, saying ‘there I see Terry Morgan, the vulture come to see what he can pick off the bones of the carcass'. But as the administrators cast about for someone to pick up the Metronet pieces, they could do worse than to call upon Bechtel as so many have done before them.
The principal lesson of the whole Metronet farrago has to be that, as with Railtrack, it is extremely expensive when academics and politicians start playing trains with our railway systems. If British Rail had been handed a fraction of the taxpayers' money now being showered over the privatised railway we would have a much better railway to show for it than we do now, and the same goes for London Underground's £ billion and Metronet.
The justification of the PPP is that it got Gordon Brown and the Treasury to sign up the long-term sums necessary to modernise the tube, which had to be preferred to the on/off sequence on the spending tap that LU suffered with each annual public spending round. But what a price to pay for the government's inability to stick to a policy of investment, as opposefd to taking money from railway capital projects for use as sticking plaster on gapingwounds elsewhere With the collapse of Metronet it is more important than ever that the Treasury ensures that the billions that the LU network still needs if we are ever to have a ‘decently modern metro' are there when required.