Soothsayers and sages of old were a pretty astute lot. Many of their pearls of wisdom still shine bright today. Here’s a couple: don’t throw good money after bad; better the devil you know than the one you don’t. Then there’s the story about the goose that lays golden eggs. And, in many parts of the world, the tradition of the first day of the fourth month of the year being dubbed April Fools’ Day – when tricks are played on unsuspecting fools – will be well understood.
Reflecting on all these, I find my concerns over news that Transport for London (TfL) will, from 1st April this year – All Fools’ Day – be handing out US$130 million (£66.5 million) to three private companies over five years to look after the UK capital city’s traffic control equipment, turning to genuine fear. For while I’ve nothing against Serco Transport Technical Services, Siemens Traffic Controls Division, and Peek Traffic, the three companies that will share TfL’s golden eggs, experience shows the taxpayer often has to pick up the bill.
Lessons from Metronet
This is not, of course, an attack on the three companies concerned. As far as I’m aware, they are all thoroughly decent and come with outstanding credentials – and they expect to earn those eggs. What I am against is the concept of TfL entering into yet more so-called PPPs (the public private partnerships so favored by Britain’s government) after its own bitter experience with the Metronet maintenance contract covering two-thirds of the London Underground system, and the shocking catalogue of poor performance from sub-contractors looking after the UK’s rail network resulting in accidents, some of which have seen fatalities.
TfL, created in 2000 as the integrated body responsible for London’s transport systems, assures us that the new deals “place greater emphasis on outputs and the accountability of the contractors for high levels of equipment availability.” TfL also says it will “monitor performance closely”.
Presumably it monitored the Metronet contract closely. Yet even before the company failed – leaving the Government to pick up the US$3.3 billion bill using taxpayers’ money – the PPP Arbiter reported Metronet had “not performed in an economic and efficient manner or in line with good industry practice.” Now I’d call that pretty damning criticism of both Metronet and the PPP system. And a TfL direct labor force wouldn’t have collapsed…
Before Metronet's collapse last year, Peter Hendy, London’s traffic commissioner and TfL’s chief officer, said: “We have repeatedly made clear our concerns with Metronet's performance and delivery of maintenance and renewal work. It is clearly time for an end to the excuses. It is up to Metronet's shareholder companies to take the action necessary to deliver on their promises to London."
Emphasis on accountability
Having had to make that kind of admission regarding a PPP, why on earth would TfL want to enter into yet another? What will be different this time? Will it be throwing good money after bad? TfL says there is a greater emphasis on accountability built into the contracts with Serco, Siemens and Peek that will “create a greater sense of ownership in the contractors and lead to even higher levels of performance from them.”
I hope TfL is right and that my fears are unfounded. Time will, of course, tell. In the meantime, let’s hope that unlike London’s Underground users and the nation’s taxpayers, the capital’s motorists will escape financial and travel suffering as a result of poorly executed contracts. Let’s hope they will actually benefit from enhanced maintenance of traffic control systems, which seem to be increasing in number every day.
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