NAO to investigate tube sell-off

The highly unusual move of investigating the hand-over of a public asset to the private sector before rather than after a contract is signed, is set against a background of a bitter feud between new London mayor Ken Livingstone and deputy minister John Prescott.

Four consortiums are bidding for the contracts to take over two groups of tube routes and they have until next month to submit their final offers. A decision on who wins the contest is due in December.

And the NAO plans to publish its report on the process in November ? only one month earlier.

The NAO – which has frequently criticised spending projects ? has on this occasion decided to intervene early.

Its investigation will increase the pressure on London Underground to ensure the PPP represents good value for money.

Prescott claims that the partnership solution is the only way to secure proper long-term finance for the underground, while Livingstone says the taxpayer will lose money in the partial privatisation.

If the PPP goes ahead there will be a further NAO report on its final outcome as well as a separate study into plans to partially privatise a third set of tube routes, known as sub-service lines, due to be dealt with next year.

Last month MPs demanded that the National Audit Office should be given a key role in ensuring that any public private partnership for the London Underground offers value for money.


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