London Assembly members say “poor commercial expertise and a lack of IT procurement skills” led London Underground to sign its ill-fated signalling upgrade contract with Bombardier.
In June 2011 the firm was awarded a £354m contract to replace and upgrade signalling systems on the Circle, District, Hammersmith & City and Metropolitan lines.“This is nothing short of a disaster for London…what is most remarkable about this affair is that no-one in TfL has been held to account.”
John Biggs AM
However in December 2013 Transport for London terminated the contract after concluding that Bombardier was unable to deliver. Despite its failures, the engineering firm
was paid £85m by TfL which later appointed Thales to carry out the work.
As a result of the need to re-tender, the Sub-Surface Upgrade Programme is five years behind schedule and is forecast to cost nearly £900 million more than originally estimated.
A new report published today by the Assembly’s Budget and Performance Committee says weaknesses within TfL left the organisation “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.”
Mike Brown, managing director at London Underground when the contract was signed,
told MayorWatch last year that the signs from projects in two other cities using Bombardier’s system “were positive” but that when problems later occurred in both, he decided to “get out of it” before any more cash was committed.
Mr Brown, who is now London’s Transport Commissioner, also told this site that it had been right to protect taxpayer money by cancelling the contract even if that meant enduring some short term criticism.
However today’s report claims senior managers were “only interested in presenting good news” and accuses them of being “in denial about the progress and effectiveness of the programme, allowing it to continue for much longer than it should have.”
Although AMs acknowledge the organisation has implemented changes to its processes, they say “the broader question about the quality of judgement shown by the senior management team remains.”
To ensure taxpayer money is better protected in future, they want Boris Johnson’s successor as mayor to beef up TfL’s board to ensure “it has the breadth of skills and experience to effectively cover all aspects of TfL’s operational and investment activity.”
Committee chair John Biggs AM 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.”
Responding to the report, a TfL spokesperson said: “Work is now well underway to upgrade the Circle, District, Hammersmith & City and Metropolitan lines, which will mean massive improvements to the frequency and reliability of services for our customers.”
“The modernisation of these lines, which make up 40 per cent of the Tube network, is vital to our city’s future. It was essential that decisive action was taken to end the old Bombardier contract as soon as it became clear that it would not deliver for London.
“As the Assembly acknowledges, we have implemented the central recommendations from KPMG’s independent review of the Bombardier contract which we published in July 2014.”
The spokesperson also said the organisation had already reduced its overheads by 15% “to make every pound go further” and is “now pressing on with removing further costs in every part of the organisation.”
They added: “We also have plans to generate £3.4 billion in commercial revenue from property and other assets for reinvestment in improving transport.”
