§ Tom BrakeTo ask the Secretary of State for Transport how much(a) Metronet and (b) its sponsors are due to be paid in (i) development costs, (ii) risk capital costs, (iii) financial and legal advice costs and (iv) bank and loan insurance costs by London Underground upon signing of contracts; what independent assessment (A) has been and (B) will be made of the validity of Metronet's financial claims; whether Tube Lines and its sponsors will be entitled to further payments beyond money it is due to receive in success fees; and if he will make a statement. [64684]
§ Mr. Jamieson[holding answer 27 June 20021London Underground will make payments to the infrastructure companies in line with the service they deliver. Both the preferred bidders, Metronet and Tube Lines Group, have developed their bids on the basis that over the lifetime of the contracts they will recover the costs they incur in enhancing and maintaining the Tube, plus associated finance costs, including a return on their direct financial investment—the level of this return will depend on the level of service delivered. Their bids also allow for their recovering the sums they have invested in developing their bids. This is perfectly normal commercial practice. Such sums include costs incurred directly by the bidders, costs associated with raising finance and fees paid to their financial, legal and other advisers.
These costs will be verified by London Underground before they can be recovered by the bidders. The Government would risk undermining London Underground's commercial position if they were to prejudge the results of this verification by estimating the level of such costs that might ultimately be recovered.