The company has not performed in an economic and efficient manner over the last three years, the Public Private Partnership (PPP) Arbiter said.

Metronet has been chastised in recent months for falling behind on its track maintenance and renewal projects.

The firm defended its record and said the report found it generally performed "at or better than benchmark".

The assessment covered the firm's activities since the PPP agreements were introduced in April 2003 and March 2006.

PPP arbiter Chris Bolt, author of the report, concluded Metronet had not "performed in line with the required standard over the period as a whole".

'Weaknesses remain'

He said Metronet had poorly planned some of its work and said management "deficiencies" were hindering the delivery of its PPP obligations.

He said it had taken measures to address "shortcomings in its performance" in the last year that have helped to improve standards.

But he said the benefits of those changes have yet to be felt, and "areas of weakness remain" including:

* Stations, where Metronet is significantly behind schedule in delivering its obligations
* Tracks, where there have been insufficient resources to deliver required volumes of work and poor delivery of maintenance and renewals

"While Metronet is demonstrating good performance in some areas, such as fleet management, it needs to make significant improvements in other areas," said Mr Bolt.

'Failing to deliver'

Mayor Ken Livingstone said the report showed that "Metronet is failing to deliver the quality and efficiency for which it is being very generously paid under the PPP".

Andrew Lezala, Metronet chief executive, said it recognised the firm's performance "has fallen short of expectations in some areas".

"We intend to ensure that appropriate improvements will be made in good time to be economic and efficient in advance of the end of the first contract period in 2010."

Bob Crow, general secretary of the Rail Maritme and Transport union, urged the government to scrap PPP.

"Failure is built into the very fabric of the PPP and it has to be ended," said Mr Crow.

See also:

Watchdog slams Tube maintenance company

Times Online: November 16, 2006
By Philippe Naughton

A sign at Kings Cross Underground station blaming Metronet for a broken escalator (Andre Camara/The Times)

Unions and passenger watchdogs reacted with "I told you so" today after an independent arbiter criticised the private company contracted to provide most maintenance services on the London Underground.

The Tube regulator, Chris Bolt, assessed Metronet on its performance from April 2003, when it took over maintenance of all Tube lines except for the Jubilee, Northern and Piccadilly under the controversial public-private partnership (PPP) scheme.

He said that the performance of the two Metronet infrastructure companies had improved over the past year, but added: "My conclusion is that neither... has performed in line with the required standard over the period as a whole."

Mr Bolt's 70-page report is his first as the official PPP arbiter and contains detailed assessments of a long list of criteria against agreed benchmarks - rather than listing the actual problems faced by passengers and train operators because of maintenance delays.

But Brian Cooke, chairman of London TravelWatch, a passenger watchdog body, said: "It will be no surprise to the long-suffering Tube passengers that Metronet’s performance is not in line with the required standard.

"After the failures, the inconvenience, the excuses and inaccurate information used by Metronet over the past year, many Londoners will regard that as a huge understatement.

"We hope that Metronet has also learnt that giving misleading information to passengers is not in their interest. Passengers want the truth."

Metronet is split into two companies, Metronet Rail SSL and Metronet Rail BCV. The other three lines are maintained by another "infraco" (infrastructure company) called Tube Lines.

Mr Bolt, who is also head of the Office of Rail Regulation as well as arbiter under the London Underground PPP, said that Metronet was "significantly behind schedule" on its work on Tube stations and there was "poor delivery of maintenance and renewals" on track work.

He said: "While Metronet is demonstrating good performance in some areas, such as fleet management, it needs to make significant improvements in other areas.

"It is particularly important that Metronet should fully implement its asset and risk management programmes and make further improvements in delivery of the track and stations programmes.

"This is essential if Metronet is to improve its overall performance to the standard required in the PPP agreements. I hope to see much clearer evidence of efficiency and economy and of good industry practice at next year’s review."

The arbiter's report is issued only for guidance purposes and does not lead to any financial penalty for Metronet, whose shareholders include Atkins, Balfour Beatty, Bombardier, EDF Energy and Thames Water.

The fear among other partners is that it would be the taxpayers who have to foot the bill to cover up for Metronet's failings.

Responding to Mr Bolt’s report, Andrew Lezala, the Metronet chief executive, said: "We recognise that Metronet’s performance in the first three years of the contract has fallen short of expectations in some areas - in particular on the delivery of station modernisations - and we are addressing this and other issues.

"We are now implementing improvements in the stations programme that we have been developing over the last 12 months and are discussing with London Underground whether we can jointly take these further."

The arbiter's prompted Peter Hendy, London’s Transport Commissioner, to call on the Metronet shareholders to deliver on their promises to London.

He said: "The arbiter’s conclusion is, unfortunately, no surprise to me or the travelling public, who have had to endure the avoidable disruption caused by Metronet’s delayed work programme, which remains seriously behind schedule.

"We have repeatedly made clear our concerns with Metronet’s performance and delivery of maintenance and renewal work. It is clearly time for an end to the excuses."

Ken Livingstone, the London Mayor, added "The arbiter’s report confirms that, despite the massive investment in renewing the Underground, Metronet is failing to deliver the quality and efficiency for which it is being very generously paid under the PPP.

"Metronet has failed to deliver the programme of station refurbishment and its over-runs on maintenance work have repeatedly delayed services for passengers. I disagreed with the PPP, and particularly its enormous cost, but we are doing all we can to make it work in the interests of Londoners. In the case of Metronet, this simply is not happening."

London Underground managing director Tim O’Toole said: "These proceedings are a mystery to the travelling public, but the quality of service is not. We have seen improvements to the Underground network, but not to the level we would expect.

Mr Bolt’s report said that Metronet had "delivered significantly less than was expected in its bid (for the PPP contract), at a higher unit cost and has earned less performance revenue than expected".

Metronet told the arbiter that it had had disputes with London Underground (LU) and there had been delays in getting approvals from LU for some work. The report went on: "However, this appears, at least in part, to be a result of poor planning by Metronet.

"The arbiter notes that Tube Lines has also had disputes but this does not appear to have hindered delivery in the same way as for Metronet."

The report also said that the PPP deal required effective partnership which relied on open sharing of information. "That does not appear to have happened," the report added.

Bob Crow, general secretary of the RMT transport union, said: "Failure is built into the very fabric of the PPP and it has to be ended."

He added: "No amount of tinkering around the edges of the PPP can disguise the fact that it is no more than a glorified scam that transforms public money into guaranteed, risk-free profits for private shareholders.

"The infraco consortiums are made up of the very companies thrown off maintenance on the national railway network for efficiency and safety reasons. Why between them they are allowed to continue ripping off taxpayers and farepayers to the tune of £2 million a week is beyond me.

"Worst of all, the PPP has fragmented and undermined the Tube’s safety culture. The PPP has failed, and the time has come for the Government to bring forward the necessary legislation to scrap it."