Monday, March 14, 2016

Another day, another 5yr delay & £900m budget deficit courtesy of inept management at TfL

Mind the £900m Gap

  • TfL spent £85m to get out of a failed signalling contract
  • It now has almost £900 million less to spend on transport improvements
  • Tube upgrade programme is five years behind schedule

Today the London Assembly Budget and Performance Committee releases the report Transport for London’s Signal Failure – which examines the circumstances behind the appointment of Bombardier Transport to upgrade signalling on the District, Circle, Metropolitan and Hammersmith & City lines.

Transport for London (TfL) ultimately paid £85 million to cancel the contract with Bombardier Transport in 2013, two years after appointment, but the ramifications of the deal are still being felt.   The Sub-Surface Upgrade Programme (SSUP) is now five years behind schedule and is forecast to cost nearly £900 million more than originally expected. 

A culmination of nearly three years’ work scrutinising TfL’s Sub-Surface Upgrade Programme, the report highlights how poor commercial expertise and a lack of IT procurement skills left TfL ill-prepared to appoint a suitable contractor for the project, and vulnerable enough to be duped into a contract which Bombardier was never able to deliver.

It draws attention to a culture at TfL which meant that management was only interested in presenting good news and was in denial about the progress and effectiveness of the programme, allowing it to continue for much longer than it should have.

Appointing Bombardier and then waiting over two years to end the contract has bigger long term costs for TfL and Londoners.  Eleven million fewer journeys than expected will take place on the underground per year between 2017 and 2023: which is estimated will cost TfL another £271 million in lost fares.  

John Biggs AM, Chairman of the Budget and Performance Committee, said: 

“This is nothing short of a disaster for London.  Neither TfL nor Bombardier’s management teams were up to the task of managing the programme, but it is Londoners that will ultimately pay the price in travel delays and inefficiencies.”

What is most remarkable about this affair is that no-one in TfL has been held to account, and the Mayor, who chairs its board, serenely and indifferently acts as if a £900 million increase to the budget isn’t an issue.  In government, heads – political or official – would roll after such financial mismanagement.  At TfL the key players have been promoted and nobody was to blame. It is a scandal. ”