Metronet calls in administrators

Source: Construction Digital

Date :18/07/2007 09:29:38

The firm which maintains most of London Underground has confirmed it is set to go into administration, leaving the multibillion-pound upgrade of the Tube network surrounded by uncertainty

Accountant Ernst & Young has been lined up to take over the running of Metronet, which is owned by private companies Bombardier, Thames Water, EDF, WS Atkins and Balfour Beatty

Metronet is to give up its two lucrative contracts to revamp two-thirds of the underground system after conceding defeat over an extensive gap in its finances.

London mayor Ken Livingstone is now expected to step in to ensure work on maintaining and upgrading the underground network will continue.

Metronet said in a statement this morning that it had asked the mayor to appoint an administrator for both of its Tube contracts following a period of "financial uncertainty".

The consortium had wanted LU to pay an extra £551 million over the next year to cover cost overruns but Tube arbiter Chris Bolt said earlier this week that Metronet should receive only £121 million.

Metronet said in its statement that it required the additional funding to enable it to carry out its contractual obligations.

"The company has now established that it has no access to such further funds.

"Metronet Rail will therefore be unable to carry out its contract and has asked the mayor to seek the appointment of a PPP administrator."

July 18 2007