BusinessCompany NewsE&Y views bond issue for Tube

E&Y views bond issue for Tube

The Ernst and Young value for money report into the government's proposedPublic Private Partnership for the London Underground is examining theoption of a bond issue to finance modernisation of the ailing Tube network.

Stephen Byers, transport secretary, said PPP had to be compared to the bondmodel before he could make a final decision on how best to fund upgrading ofthe Tube.

Previously it was thought Ernst and Young would focus only on comparing PPPwith the costs of funding modernisation through traditional public spendingmethods.

Byers said he had an open mind as to which option would eventually bechosen.

‘I am not coming at this from a dogmatic position. I want to deliver what’sbest for passengers in London,’ he said.

A bond issue is the favoured option of London Mayor Ken Livingstone and histransport supremo Bob Kiley who will take control of the Tube once fundingis sorted out.

A final decision will be taken by the transport secretary in mid-March.Byers said he expected to receive Ernst and Young’s report by the beginningof next month.

His announcement came as rumours continue to circulate at Westminster andthe City that the government is looking to abandon the controversial PPP.

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