§ Harry CohenTo ask the Secretary of State for Transport whether the sharing of windfall profits was the subject of negotiations with the infrastructure companies in the London Underground Public Private Partnership contracts; whether provision is made for windfall profits in the contracts; and if he will make a statement. [137521]
§ Mr. McNultyWindfall profits were considered in the negotiations between London Underground and the PPP consortia.
The contracts provide the infrastructure companies reasonable certainty that they will receive a level of payment sufficient to earn an agreed rate of return if they are economic and efficient in delivering the services. The periodic reviews, every 7½years, by the independent PPP Arbiter will, among other things, aim to enable the infrastructure companies to earn an agreed rate of return for the next period, while providing efficient and economic delivery of their services and take account of the rate of return earned in previous period.
The contracts specify that in the event of the infrastructure company re-financing its debt, London Underground Ltd. would receive a share of any benefit.