UK Tube Faces Financial Shortfall

UK tube consortium Metronet, which looks after three London tube lines, is facing the threat of administration due to a shortfall in owed payments .

A UK Government arbiter ruled that London Tube operator London Underground must pay an extra £121m to Metronet, which had initially put forward a claim for £551m.

Metronet's five owners, which include UK engineering company Balfour Beatty, have seven days to respond to the arbiter ruling, with a final decision due by July 31.

The news came as Metronet announced construction had begun on the first air-conditioned tube trains today.

Metronet's supply-chain partner Bombardier Transportation began welding together the first sections of an aluminium underframe to create a sub-assembly for the new train.

When the roof and side panels are added later this summer the shell will be ready for structural integrity tests. Metronet says the train is a completely new design that will accommodate the operating environment of the underground which uses existing technology and components.

The eventual production run is expected to create a single fleet of increased size to replace the 177 trains of different types on the Metropolitan, District, Circle and Hammersmith & City lines. The first train is expected to arrive on the Metropolitan line by 2010.

Metronet, which is responsible for maintaining London's Bakerloo, Central, Victoria, District, Circle and Metropolitan Lines, has run up £992m of additional costs upgrading the tube lines. It says the overspend can be accounted to additional work requested by London Underground.

Metronet is expected to make a statement following a board meeting today.

By staff writer