Transport For London says launches bid for Metronet

By Dan Lalor

LONDON (Reuters) - Transport For London (TfL) said on Thursday it had lodged a formal bid to take control of Metronet, a consortium that failed while upgrading two thirds of the London Underground rail network.

London's mayor, Ken Livingstone, whose TfL organisation funds Metronet's work, has said previously he wants to take control of the company and split up the remains of its 17 billion pound contract.

"Under TfL's plans, the people and the assets of Metronet Rail BCV Ltd and Metronet Rail SSL Ltd will be transferred into two TfL nominee companies, which will be managed on a standalone basis whilst the long-term structure is agreed with the mayor and government," TfL said in a statement.

Metronet's administrator, Ernst & Young, said in a statement "a response to TfL will be made over the coming week or so". It also announced the departure of the chief executive and finance director of the two Metronet companies as well as three other senior managers.

The Metronet consortium was forced into administration in July after running up 2 billion pounds of unscheduled costs while renovating nine of London's 12 underground lines.

The collapse of Metronet damaged the image of public-private partnerships (PPP), a formula that Prime Minister Gordon Brown has favoured for infrastructure projects.

Metronet is owned by WS Atkins, Balfour Beatty, the rail equipment unit of Canada's Bombardier Inc., EDF Energy and Thames Water.

A government-appointed arbiter has said Metronet's biggest cost overruns had occurred on station upgrades, where rival maintenance firm Tube Lines had worked more efficiently.

Ernst & Young said it had appointed London Underground veteran Andie Harper as chief executive of Metonet Rail BCV Metronet Rail SSL with immediate effect, succeeding Andrew Lezala.