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| Version 1 | Version 2 |
|---|---|
| Metronet costs taxpayers £1.7bn | Metronet costs taxpayers £1.7bn |
| (29 minutes later) | |
| Almost £2bn of taxpayers' cash is being given to London Underground to cover the collapse of the private maintenance firm Metronet. | Almost £2bn of taxpayers' cash is being given to London Underground to cover the collapse of the private maintenance firm Metronet. |
| A total of £1.7bn will be used to pay back the sum lenders made available to the company, which went into administration last July. | A total of £1.7bn will be used to pay back the sum lenders made available to the company, which went into administration last July. |
| The deal was announced in addition to a 10-year £39bn funding package for Transport for London (TfL). | The deal was announced in addition to a 10-year £39bn funding package for Transport for London (TfL). |
| Critics said it represented a "bail out" of the firm but TfL denied this. | |
| He added the £1.7bn would have been paid back to lenders over the course of the public private partnership (PPP) deal had Metronet survived. | He added the £1.7bn would have been paid back to lenders over the course of the public private partnership (PPP) deal had Metronet survived. |
| The spokesman said: "It will have limited net impact on public finances since Metronet's borrowing was already part of the government's balance sheet." | The spokesman said: "It will have limited net impact on public finances since Metronet's borrowing was already part of the government's balance sheet." |
| 'More stable' future | 'More stable' future |
| Transport secretary Ruth Kelly said the cash "carries forward our commitment to modernising and extending the capital's public transport system". | Transport secretary Ruth Kelly said the cash "carries forward our commitment to modernising and extending the capital's public transport system". |
| Metronet was responsible for maintaining two-thirds of the Tube network. | Metronet was responsible for maintaining two-thirds of the Tube network. |
| Created under a private-public financing initiative, Metronet announced last year it was no longer able to meet its obligations amid spiralling costs. | Created under a private-public financing initiative, Metronet announced last year it was no longer able to meet its obligations amid spiralling costs. |
| Ms Kelly added: "The settlement gives London Underground the resources needed to manage Metronet's administration and move toward a more stable long-term footing and continue the work to maintain, renew and upgrade the Underground." | Ms Kelly added: "The settlement gives London Underground the resources needed to manage Metronet's administration and move toward a more stable long-term footing and continue the work to maintain, renew and upgrade the Underground." |
| TfL plans to take over Tube maintenance contracts from Metronet once it is removed from administration. | TfL plans to take over Tube maintenance contracts from Metronet once it is removed from administration. |
| 'Scandalous' | |
| Most of the government's £39bn funding will be spent on the Tube, but it also included investment in TfL's contribution to the Crossrail scheme, preparations for the 2012 Olympics and the expansion of rail and bus services. | Most of the government's £39bn funding will be spent on the Tube, but it also included investment in TfL's contribution to the Crossrail scheme, preparations for the 2012 Olympics and the expansion of rail and bus services. |
| London's mayor Ken Livingstone said: "London's transport network underpins the capital's economy, which benefits the whole of the UK. | London's mayor Ken Livingstone said: "London's transport network underpins the capital's economy, which benefits the whole of the UK. |
| "This settlement recognises the crucial role transport plays in London's economic success and the importance of completing the renewal and expansion of the network that we have been driving forward since 2000." | "This settlement recognises the crucial role transport plays in London's economic success and the importance of completing the renewal and expansion of the network that we have been driving forward since 2000." |
| But Bob Crow, general secretary of the Rail Maritime and Transport union, said: "It was bad enough that Metronet's collapse cast a shadow over London's essential Tube upgrades, and it is scandalous that the public will have to pick up the £1.7bn bill to pay off its lenders." | |
| 'Speed up work' | |
| Mr Crow added: "The privateers were never going to lose from the PPP, and Metronet's shareholders are still raking in millions from the Tube contracts they awarded themselves." | |
| However Brian Cooke, spokesman for passenger group London TravelWatch, welcomed the funding. | |
| "We hope the confirmation of funding means that TfL can now speed up any work on the transport network that may have been delayed because of fears that TfL would have to bear the cost of Metronet's collapse," he said. | "We hope the confirmation of funding means that TfL can now speed up any work on the transport network that may have been delayed because of fears that TfL would have to bear the cost of Metronet's collapse," he said. |
| "We also want to see any other major projects that have been delayed get off the ground as soon as possible." | "We also want to see any other major projects that have been delayed get off the ground as soon as possible." |