Friday, August 24, 2007

Getting Caught Off-Balance

A column written for last month's Scots Independent. Not exactly hot news any more, but still something we're likely to hear a lot more about in the years ahead.


Edinburgh’s transport woes never seem to be very far from the front pages. Over the past decade, there’s been uproar over ‘Greenways’, a guided busway, traffic re-routing, road charging and now, trams. Say it quietly, but despite our superb bus network, many Edinburghers cast envious eyes westwards towards Glasgow and southwards towards London – both cities which had the good sense to keep their overground and underground train networks intact after they had been built.

It’s been a while since I took a trip on the ‘clockwork orange’, but now that I’m working in Westminster, the London Underground is one engineering marvel with which I’m becoming increasingly familiar. However, even its undoubted Edwardian charm and convenience, can’t blind you to the shortcomings of the system.

In summer, commuters are crammed face-to-armpit, in conditions which you would be forbidden to transport cattle. Wires hang out of exposed service ducts, escalators jolt, signals fail, trains jump over gaps in the rails… Altogether, with the exception of perhaps a couple of lines, the impression is of a mass-transit system kept working with twine, gaffer tape and a collective crossing of fingers.

Realising that something needed to be done if London was to secure its position as a key economic centre, a massive upgrade to the system was unveiled back in 2003. However, even once the will had been galvanised, the question still remained of how to pay for it all. In the end, despite the best efforts of Mayor Ken Livingstone and his ex-CIA transport guru Bob Kiley, the then Chancellor Gordon Brown rejected their proposals to fund the upgrades through bond issues, insisting instead on a convoluted PFI arrangement.

Of course, the biggest attraction of PFI for the government is that it it allows the resulting capital investment to be kept 'off balance sheet'. It doesn't cost any less, and in fact over time usually ends up costing the taxpayer significantly more. However, a succession of useful idiots can usually be found to defend PFI, on the spurious grounds that it means a new school or hospital for their constituency, which, we are invited to believe, could not be delivered any other way. And with Gordon Brown sailing perilously close to the edge of his self-proclaimed 'golden rule' of only borrowing to invest over the economic cycle, PFI again won out for the London Underground projects.

One of the successful bidders was an outfit called ‘Metronet’, set up by a consortium made up of Atkins, Balfour Beatty, Bombardier, EDF Energy, and Thames Water. Together, they
won a 30 year, £30bn contract to run and upgrade parts of the network. Last month, it went belly-up, asking Ken Livingstone to call in the administrators. Amidst accusations of inadequate cost controls and poor value from the contracts dished out to the parent companies, the future of the upgrades for which they were responsible must now be in serious doubt.

Think this doesn't affect Scotland? Well, think again. Between them, Transport for London and the private sector will doubtless scrape together the cash necessary to complete the upgrade over time, although having already had their fingers burned once, the City will probably have some tough questions to ask second time round. No, money won't be a problem, if only because the one thing the authorities no longer have on their side is time.

The reason for this is one with which we're likely to become depressingly familiar in the years ahead. Let's rewind to 2005, and the London bid to win the 2012 Olympics. Here's what the report of the IOC Evaluation Commission had to say with respect to the transportation aspects of London's bid:

“During the bid process, substantial London rail transport infrastructure investments have been clearly confirmed, guaranteed and accelerated. Provided that this proposed programme of public transport improvements is fully delivered on schedule before 2012, the Commission believes that London would be capable of coping with Games-time traffic and that Olympic and Paralympic transport requirements would be met”.

In other words, if the programme is not fully delivered, London would not be capable of coping. Failure is unthinkable for the UK government. And since Gordon Brown very generously agreed that the UK government would underwrite any financial overspend incurred by the 2012 games, guess who will be expected to dig as deep as anyone else to make sure it all happens on schedule, even if not on budget?

Yep, that's right - us. Doubtless London will be festooned with Union Flags come 2012, but somehow, I suspect that having been sent a bill but not an invite to share in the goodies, the corresponding reaction from Scotland will end up being less than supportive. It doesn't seem like much of a Union dividend to me.

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