Socialist Worker

Companies expect to make £900 million from London's tube infrastructure

Issue No. 1822

THE COMPANIES due to take over the infrastructure of London's tube under the government's PPP privatisation scheme expect to get a 500 percent return on their investment. The figure comes from a study by the Labour Research Department.

Brian Staples is chair of Tube Lines, one of the three consortia. He is also chief executive of Amey, one of the companies involved. He has told shareholders Amey expects to get £10 million a year for the duration of its 30-year contract. The firm will make £300 million in all on its £60 million investment. Staples also expects to cash in on fees for seconding Amey staff to Tube Lines, as well as by selling 'services and products' to London Underground.

The Tube Lines consortium overall expects to get £900 million return on a £180 million investment. Brian Staples has already been awarded a 23.7 percent rise, bringing his salary to £612,000, not including share options and other perks.

THE GOVERNMENT is pressing ahead with the privatisation plan for the tube just as public sector finance directors and accountants say the Private Finance Initiative (PFI) is a waste of money. A study by the Association of Chartered Certified Accountants found that some 57 percent did not believe PFI is value for money. Almost 60 percent believed PFI schemes were pushed through without proper comparison with what could be built in the public sector.

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Sat 19 Oct 2002, 00:00 BST
Issue No. 1822
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