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  Government ‘naïve’ over Tube deal, says MP  

The Department for Transport's deal
 with Metronet to upgrade the Tube
network ran into difficulties when
Metronet went into administration

Commenting on the Commons public accounts committee’s report on the failure of the Department for Transport’s deal with Metronet to upgrade the London Underground, South Norfolk MP Richard Bacon, a member of the committee, said:

“The Department for Transport’s deal with Metronet to upgrade London’s Tube network was based upon a series of naïve assumptions, which were shown to be wide of the mark when Metronet went bust in 2007, taking up to £410 million of taxpayers’ money with it.


“The Department for Transport ignored clear warnings over the dangers of a ‘hands-off’ approach and kept handing over £1 billion each year, based on the supposition that Metronet’s financial management and corporate governance were up to scratch.  They were not. 

“The Department also assumed that those lending to the PPP would want to keep a close eye on their investments but the government’s promise that taxpayers would cover 95 per cent of any losses meant lenders had little incentive to do anything. 

“What comes through repeatedly from this report is the disastrous hands-off approach of the Department for Transport.  All of Whitehall must learn from the mistakes made on this deal and ensure that in future much better care is taken with taxpayers’ money”. 

2 March 2010

See also:
PAC REPORT: The Failure of Metronet
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© Richard Bacon 2010