PPP bidders prepare for handover
INTRO: As the long and often controversial process to set up the Public-Private Partnership nears completion, Metronet and Tube Lines are preparing to take over train and infrastructure maintenance on the London Underground network by the end of this month. Each consortium is planning a package of track renewals, resignalling and new rolling stock to deliver a more frequent and reliable train service under the 30-year PPP contracts. Robert Preston spoke to the preferred bidders
THREE YEARS after they were first invited to prequalify for the PPP, the two remaining private-sector consortia expect to make it to the finishing line by the end of June. A key milestone was passed on May 8, when commercial close was achieved. The London Underground board voted unanimously to approve the signing of Share Purchase Agreements with the Metronet and Tube Lines consortia, which will come into force when financial close is reached. Metronet Chief Executive Rod Hoare called the signing 'a significant step forward', and Tube Lines CEO Terry Morgan said it was 'a breakthrough'.
Financial close will follow as soon as the European Commission is satisfied that the PPP transactions do not breach its state aid and competition regulations. Once the UK Health & Safety Executive has approved the final revisions to LU's Railway Safety Case, staff at Infraco JNP will transfer to Tube Lines and those at BCV and SSL to Metronet.
According to Bombardier, Metronet's five equal shareholders will invest £350m, with each taking a £70m equity stake in the Infraco holding companies. Two wholly-owned subsidiaries, Metronet Rail SSL Finance plc and Metronet Rail BCV Finance plc, will raise a further £2·5bn in the debt markets. Tube Lines' three partners each plan to take an equity stake of £60m, allowing the consortium to raise an initial £2bn in debt.
'We're not a management team in waiting', stresses Metronet's Operations Director Ben Harding. In his mind the transfer represents 'a takeover of an existing, going concern'. This is a view shared by Tube Lines' Director of Projects Peter Henderson. At the end of April he reported 'an enormous amount of work going on', with Tube Lines and Infraco JNP hard at work on an integration programme aiming to ensure that all runs smoothly from Day 1.
As well as private finance for investment programmes totalling £7bn at Metronet and £2bn at Tube Lines over the first 71/2 year review period for which committed offers have been made, the consortia will bring project management expertise to the table. At Tube Lines, Henderson expects 30 'extremely experienced' Bechtel staff to join the new organisation, where one of the first major projects will be to resignal the Jubilee line throughout. In a change to earlier proposals that would have seen the Northern line resignalled first (RG 3.00 p160), the Jubilee now takes precedence 'to meet the anticipated rapid growth of employment in the Docklands area', according to LU's final assessment report on the PPP.
Tube Lines is looking to use common systems on the Jubilee and Northern lines and expects to award a single contract. In line with its 'supplier-independent' approach to source each package of work competitively, the consortium has gone out to tender and expects to select a preferred bidder during the first quarter of 2003. 'We've got the top suppliers in the world knocking at our door', says Henderson. Although the specification has been open to ensure 'a wide range of bidders', he is adamant that proven technology will be selected. 'We will not be at the front end of the curve', he says, but this does not rule out transmission-based signalling which, for example, has been successfully introduced to Hong Kong where Henderson's 16-year career with MTR Corp included managing its capital investment programme.
By 2008, capacity on the Willesden Green - Stratford section of the Jubilee line will have been increased from 20 to 33trains/h, rising from 10 to 22 and 15 to 27 on the Stanmore - Wembley Park and Wembley Park - Willesden Green sections respectively. On the Northern line, the goal is to increase capacity on all sections from 18 to 25trains/h, except Kennington - Morden which will rise from 27 to 33 and High Barnet - West Finchley which will increase from 13·5 to 18·7.
Resignalling of the Piccadilly line is scheduled for the second review period beyond 2010, and here Tube Lines is 'keeping our options open'. A fleet of 92 new trains will be introduced by 2013, but during the first review period 12 new trains on the Jubilee line will complement the 59 sets supplied and maintained by Alstom, which are also to be lengthened by one car. 'We will have refined our procurement approach in the next two to three months', says Henderson, but proven technology is again the aim as 'you do not go with the front-end stuff'.
In contrast to Tube Lines, Metronet has already established a supply chain that includes all of its shareholders, and will be ready to sign contracts once financial close is achieved. The outcome of the competition for BCV and SSL has proved Metronet's bids to have been 'technically competent and price-efficient', according to Harding, thereby testing the cost-effectiveness of the supply chain. In any event, the Metronet shareholders would have no interest in charging themselves inflated prices, he suggests.
Westinghouse Rail Systems will be acting as subcontractor to Bombardier on the resignalling of the Victoria line, key to the first major route upgrade under the PPP that Metronet aims to complete by 2009. The aim is to reduce the journey time from Walthamstow and Brixton by 20% through a combination of new trains and distance-to-go signalling (RG 10.01 p689), for which Madrid Metro is providing 'a hell of a good pilot' according to Harding. Proven technology will be essential: 'I always like to be a year or five behind the leading edge', he says.
Distance-to-go is also in the frame for the resignalling of the Sub-Surface Lines, and Metronet aims to have routes north of High Street Kensington and Aldgate completed by the end of the first review period. With Bakerloo line resignalling scheduled for the second review period, a different solution may be adopted, but as yet Harding feels 'the risks are very high' with moving block.
Bombardier will be supplying two designs of train to Metronet, both featuring IGBT drives and full-width gangways. The first of 47 eight-car trains for the Victoria line is expected to enter service on August 1 2008, and the Bakerloo line will receive similar cars during the second review period. In contrast to the three different types in service today, 1362 cars in varying train lengths will be supplied for SSL from April 2009, all to be maintained at Neasden where Metronet plans 'significant' investment.
Track is the key
Metronet's Operations Director believes that track quality is 'the key to a successful railway', and work to remove speed restrictions and thus accelerate journey times will form a major part of the Infraco workload during the first review period. Metronet will replace 8·2 km of track on the Bakerloo line within four years, 21 km on the Central line in the first three years and 9 km on the Victoria line within the same timescale. Tube Lines is planning to renew 103 km of track within the first 71/2 years, focusing on the Acton Town - Heathrow and King's Cross - Cockfosters sections of the Piccadilly line.
Under the PPP, LU assets transferred to the care of the privatised Infracos are graded for condition from A to E, where an E grading requires immediate attention. Under a 'top-loaded' programme, Harding explains that Metronet will work to progressively reduce the number of assets falling in grades B to D, and by the end of the first review period it will be required to have removed all 'grey' assets. Within this category fall assets whose condition is not fully known at present, such as the linings of the deep narrow-profile tunnels on BCV which can only be inspected from the inside.
Work to renew 30% of LU track in the first review period will be undertaken under a performance regime that encourages the use of overnight possessions, and which has been tightened during contract negotiations to penalise the Infracos for allowing engineering work to over-run and result in sections of the network not being open to traffic, measured in Lost Customer Hours.
To maximise the use of limited possession times, both Metronet and Tube Lines are looking to further mechanise track maintenance and renewal through the use of specialised equipment. Stephen Peat, Director of Operations at Tube Lines on secondment from Amey, expects to draw on his company's experience of maintaining the Railtrack network and that of fellow consortium member Jarvis.
This will encompass planning as well as plant, and he aims to combine maintenance with work on the capital projects managed by Peter Henderson. 'When Peter is working there, maintenance people will be there', says Peat, who sees his key task as taking 'a long-term, sustained approach to whole-life asset management'.
Infraco performance under the final PPP contracts will be measured against benchmarks for availability, capability and ambience. Disruption that causes reduced availability is expressed in Lost Customer Hours, with the actual length of delay multiplied to reflect an estimate of the number of passengers affected, the nature of the delay they experience and what LU terms 'the subjective extent' of the disruption, where, for example, one 10min delay has more weight than two 5min delays. The likely impact of the delay across the system is also taken into consideration.
Thus a train that is delayed between stations during the morning rush hour in the centre of London will generate more Lost Customer Hours than a delay of similar length experienced at a station platform on a less-busy section of the network outside peak hours. For failing to meet the availability benchmark, Infracos will incur an abatement of £6 per Lost Customer Hour, increasing to £9 should performance fall below an 'unacceptable' level. Should the benchmark be exceeded, a bonus of £3 per Lost Customer Hour applies. In general, availability benchmarks have been against LU performance in Period 5 of 2000-01 and Period 7 of 2001-02, with an additional benchmark established for removing temporary speed restrictions due to poor track quality.
LU assumes that the Infracos will undertake track renewal in the order which reduces the level of temporary speed restrictions most quickly, and any that remain for more than three periods transfer into the capability regime. This is measured as Journey Time Capability, with contractually-binding improvement targets set for line upgrades. For Ben Harding, the contract structure of the PPP is all about 'taking the customer's viewpoint', which has encouraged Metronet to take 'a holistic approach' in determining the best combination of train, signalling and track improvements to improve journey times.
Train and station ambience will be measured through 'mystery shopper' surveys. In some areas benchmarks have been set higher than recent average performance because, according to LU, 'current levels of litter and cleanliness are considered unacceptable', but it has proved difficult to devise physical tests for aspects of train ambience such as ride quality, noise and ventilation. Provision has therefore been made for changes once the contracts have been signed.
When the Infracos are handed over to Metronet and Tube Lines under the Share Purchase Agreements, LU's operating functions, including drivers and signalling personnel, will become the responsibility of Transport for London under its Commissioner Bob Kiley.
Since his appointment, Kiley has been critical of the PPP, recently describing it as 'reckless, wrong and riding roughshod over London'. However, the bidders expect a more businesslike approach once the new regime is in place. 'Everyone will know what the rules are', says Ben Harding at Metronet. At Tube Lines, Peter Henderson stresses 'we will make sure that it is a constructive relationship'.
n Bombardier Transportation
n Seeboard Group plc
n Balfour Beatty plc
n Thames Water plc
n WS Atkins plc
n Amey plc
n Bechtel Enterprises Holdings Inc
n Jarvis plc
TABLE: Infracos in perspective
Infraco Track Stations Lifts Escal- Cars Staff -km ators
BCV 298 76 23 145 1296 2500
JNP 340·2 100 71 223 1512 2400
SSL 366 97 13 53 1194 2500
CAPTION: Metronet plans to replace 21 km of track on the Central line within three years of signing the PPP contract
Photo: M Vleugels
TABLE: SSL service improvements
First review period District Metropolitan, Circle Hammersmith & City
Increase in capacity - 3%
Improvement in train reliability 42% 30%
Improvement in signal reliability 36% 38%
Improvement in track reliability 38% 37%
Improvement in train ambience 19% 1 15%
Rolling stock improvements - 2 -
1. By 2004 2. All trains refurbished by 2005
14 stations modernised and 70 refurbished
12% improvement in station ambience
Improvement in escalator track reliability 14% -
Reduction in delays due to lift/escalator faults - 7%
Reduction in delays for other station faults 29% 25%
Second review period
78 new trains plus new signalling system by 2014; 12% increase in capacity
Metropolitan, Circle, Hammersmith & City
112 new trains plus new signalling system by 2011; 17% increase in capacity
4 further stations modernised and 80 refurbished
TABLE: BCV service improvements
First review period Bakerloo Central Victoria Waterloo & City
Increase in capacity - - 5% 6 12%
Improvement in train reliability 33% 40% 41% 49%
Improvement in signal reliability 30% 33% 26% 28%
Improvement in track reliability 29% 29% 32% 32%
Improvement in train ambience 22% 16% 21% 16%
Rolling stock improvements - 1 - 2 - 4 -
Upgrading work - - 3 - 5 - 7
1. One additional train in peak service 5. New crew facilities at Brixton and Seven Sisters2. Two additional trains in service by 2003 6. By 20043. Signalling upgrade complete by 2005 7. Signalling upgraded by 20044. Trains in service increased to 39 peak and 30 off-peak
21 stations modernised and 43 refurbished
16% improvement in lift and escalator reliability
15% improvement in station ambience
Second review period
42 new trains plus new signalling system; 15% increase in capacity
47 new trains and new signalling system by 2011, giving further 11% increase in capacity and 45% improvement in signal reliability
New crew facilities at Walthamstow
17 further stations modernised and 40 refurbished
TABLE: JNP service improvements
First review period Jubilee Northern Piccadilly
Increase in capacity 22% - -
Reduction in delays due to train, signal and track faults 15% 25% 32%
Improvement in train ambience 15% 11% 12%
Rolling stock improvements - 1,2 - -
1. Extra car on each of 59 existing trains 2. 12 additional new trains
30 stations modernised and 41 refurbished, 65 lifts refurbished
10% reduction in station system faults
100% of communications systems replaced
Deep cleans and interim refurbishments to improve ambience
Second review period
New signalling system with enhanced control centre; 10% increase in signal reliability
Two extra trains in peak service; 18% increase in capacity by 2010
106 trains refurbished by 2015
Transmission-based signalling system with new control centre
20% increase in capacity
92 new trains by 2013
10% increase in train and signal reliability
4% improvement in train ambience
3 further stations modernised and 60 refurbished
'Everyone will know what the rules are'
Operations Director, Metronet
'We've got the top suppliers in the world knocking at our door'
Director of Projects, Tube Lines
'A long-term, sustained approach to whole-life asset management'
Director of Operations, Tube Lines
Private sector prepares for metro upgrade
The three London Underground subsidiaries responsible for infrastructure and train maintenance are expected to transfer to the private sector this month under the British government's Public-Private Partnership. Under 30-year contracts requiring them to deliver train service performance assessed on the basis of passenger journey times, availability and ambience, the Metronet and Tube Lines consortia are planning to invest a total of £9bn over the first seven and a half years. In time 383 new trains will be introduced and resignalling undertaken on most routes, but track renewal will be high on the list of immediate priorities.
Le secteur privé prépare l'amélioration du métro
Les trois filiales de London Underground, responsables de l'infrastructure et de la maintenance du matériel, doivent être transférées ce mois-ci au secteur privé, dans le cadre du partenariat public-privé initié par le gouvernement britannique. Selon les termes des contrats sur 30 ans, qui prévoient la mise à disposition de rames capables de performances s'appuyant sur le temps de transport des voyageurs, la disponibilité et l'ambiance du métro, les consortiums Metronet and Tube Lines envisagent d'investir au total 9 milliards de livres au cours d'une première période de sept ans et demi. A terme, 383 nouvelles rames seront mises en service et le remplacement de la signalisation entrepris sur la plupart des lignes, mais le renouvellement des voies occupe un rang élevé sur la liste des priorités immédiates
Private bereiten sich auf U-Bahn-Ausbau vor
Die drei Tochterunternehmungen von London Underground, welche für Infrastruktur- und Fahrzeugunterhalt verantwortlich sind, sollen diesen Monat im Rahmen einer Public-Private Partnership der Britischen Regierung privatisiert werden. Unter den 30-Jahres-Verträgen, welche sie verpflichten, an Reisezeiten, Verfügbarkeit und Ambiance gemessene Betriebsleistungen zu erbringen, wollen die Metronet- und Tube Lines-Konsortien innerhalb der ersten siebeneinhalb Jahren total 9 Milliarden Pfund investieren. In diesem Zeitraum werden 383 neue Züge beschafft und die meisten Strecken mit neuen Signalisationssystemen ausgerüstet. Jedoch wird auch die Erneuerung des Oberbaus mit h