London Underground has said it is not currently considering any reduction to its major works programme, despite being asked to pay the Tube Lines consortium 拢460m more than it says it can afford

This week the PPP arbiter made a decision that London Underground should pay Tube Lines 拢4.46bn to complete its works over the next seven-and-a-half years, compared with its original budget of 拢4bn.

Significantly, the arbiter also made a draft ruling that LU would have to raise this extra money from its own resources, leading to further fears that other schemes will be put in jeopardy.

Richard Parry, LU鈥檚 managing director, said: 鈥淲e鈥檙e not contemplating any scope reduction willingly. We鈥檝e already cut back as much as we can, and there is nothing left now except for major schemes such as the Piccadilly line.鈥�

Parry also ruled out cancelling major projects outside the PPP.

He added: 鈥淔or example, we鈥檝e fought hard to make the case for the Victoria station upgrade and to cancel that now would severely limit the effect of the line upgrade.鈥�

LU also said it was considering taking legal action against the arbiter if it had to raise the extra 拢460m itself. It has argued that Tube Lines, a consortium led by Ferrovial and Bechtel, should raise the money and that LU would then pay them back in a later stage of the PPP.

Parry said: 鈥淥ur firm belief is that the contract says it is up to the private sector to provide a further cash injection. The arbiter has been minded not to make them raise the money. We think that鈥檚 a misdirection of his power under the contract.鈥�

Meanwhile, LU has hired auditor KPMG to investigate and report on Tube Lines鈥� finances, including what LU describes 鈥渟ecretive secondment fees paid to Ferrovial and Bechtel鈥�.

Andrew Cleaves, Tube Lines鈥� acting chief executive, said the fees paid were fair. 鈥淭hey aren鈥檛 secretive,鈥� he said. 鈥淭he arbiter supports them and they are perfectly normal for the construction industry.鈥�

A final decision on financing will be made on 29 April.

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