The London mayor has indicated that Tube Lines, one of two companies that maintain the underground network in a £30bn public private partnership contract, will not take over the rest of the agreement if fellow contractor Metronet collapses.
Ken Livingstone said Tube Lines might buckle under the pressure of turning around a project that is struggling with cost overruns of at least £750m. Metronet is close to seeking an extraordinary review of the overspend, which could force the company into liquidation if it is ordered to meet the entire cost.
Tube Lines has been mooted as a white knight for the PPP contracts, because it has delivered its side of the deal on budget. Mr Livingstone said yesterday that he might not turn to the company if Metronet's shareholders walk away from the PPP.
"There is a real problem that if you dump this mess on Tube Lines then it might sink Tube Lines as well. If [Metronet] goes into liquidation ... I will have a long discussion about the exact way we will manage the system." If Metronet collapses, the management of maintenance will revert in the short-term to Transport for London.
A Metronet spokesman said the mayor's comments underlined the difficulty of completing the PPP work on time and on budget. "It is an acknowledgement to some degree that the task we have is a very large one."
Tube Lines declined to comment.
A leaked Transport for London document estimates that Metronet's station upgrade programme is 10,000 days late - a figure which Metronet denies. Mr Livingstone said the delays were an indictment of Metronet's management of the contract: "If there was a gold medal for managerial incompetence they would be winning it."
The briefing war between Metronet and the mayor is escalating as both sides trade blame for the cost overrun, which is now thought to be around £1bn. Metronet claims that costs have soared because TfL has demanded extra work not specified in the contract, from extra handrails in stations to excessive numbers of tannoy speakers. The company reiterated its case yesterday that the station refurbishments have been "ill-defined".
Mr Livingstone dismissed those arguments yesterday, saying poor management had caused the overspend and that Metronet would not have run up a £750m bill "even if we were rebuilding the stations in solid gold".
In an interview with the Guardian recently, the Tube Lines chief executive, Terry Morgan, said the company was on budget and "working within our parameters" because the company tenders out all its contracts in the open market.
Metronet has, until recently, taken the opposite approach of using a closed supply chain made up of its five shareholders.
"We have competitive procurement. Our shareholders have no right to our supply chain, they can compete for contracts if they wish," Mr Morgan said.
Mr Morgan declined to comment on the possibility of Tube Lines inheriting some of the Metronet contracts. The company is owned by Ferrovial, the Spanish conglomerate, and Bechtel, a project management specialist.
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