London Underground and the PPP: the third year 2005/06

Report for financial year ending 31 March 2006

MAYOR OF LONDON Transport for London

London Underground and the PPP: the third year 2005/06 1.

Contents

1. Foreword 3 2. Background 6 3. PPP contractual performance 8 4. Maintenance and asset performance 27 5. Renewals and upgrades 38 6. Asset management 49 7. Financial outcomes 51 8. Safety and environmental performance 56 9. Managing the investment programme 59 10. Overall performance 62

Copyright London Underground Limited 2006 All Rights Reserved. No part of this publication may be reproduced or transmitted in any form (including photocopying or recording) without the express prior written permission of London Underground Limited.

Nothing in this report shall create any legal relations between London Underground and any other party nor shall be deemed to interpret, amend, waive or otherwise affect any provision of any contract or agreement identified herein. The report is issued without prejudice to the exercise by Transport for London or London Underground of their rights under any contract or agreement identified herein.

London Underground and the PPP: the third year 2005/06 3.

1.0 this is gratifying, it does not alter the fact that customers judge us on their last journey. Failures Foreword continue to undermine the steady improvements being made, and rising expectations make it harder to credit improvements when failures make performance inconsistent. Sustaining performance improvement requires consistency from Infracos in their maintenance activities, and consistency from London Underground in our operating activities. The latter overwhelmingly depends on the performance of our 13,000 employees. Every member of the company was personally invited to one of a series of face to face meetings in November last year. These provided Without question, 2005/06 was an extraordinary the opportunity for me to explain the priorities for year for London and for London Underground. the company, and for staff to raise their questions At the start of the year we recognised our best directly with the top level of management. It is year of performance for some considerable time encouraging that so many of our staff refused to and were looking forward to the trend continuing. let down customers on New Year’s Eve, despite the We celebrated with London the IOC’s award of calls of certain unions. Overall, the two-year pay the 2012 Olympics to this great city – a decision deal agreed in 2004 has provided stability and the that partly reflects our role in demonstrating the level of industrial action over this period has been bid rested on a credible transport plan. low. We are seeking a further multi-year deal with These events were overshadowed by the terrorist our staff to provide a continued period of certainty. atrocities of 7 July 2005, which were an outrage However, the overall performance of London not only against London and the people of London, Underground continues to be hampered by the but on its transport system and those who keep it performance of old assets that should have been running. I have praised the magnificent response renewed and maintained to a higher standard long of London Underground staff, and I shall continue before now. The PPP is now in its fourth year, which to do so. I have also paid tribute to the excellent means we are already 10% of the way through these response of the Infracos, Tube Lines and Metronet, 30-year contracts. There are indications that with the to these events. Their support was immediate and right focus from the Infracos, the contracts can deliver absolute, and once the police returned control of the step change in asset condition that they set out the incident sites, they worked quickly to restore to. The last year has seen some notable achievements, services for customers. London’s recovery in the but the Infracos have failed to deliver on the two months since July has been impressive, and by challenges highlighted in this report a year ago. the autumn, passenger numbers on the tube were already growing again. The notable achievements include the completion of the Wembley Park station rebuild on time and The overall trend of improving performance over below budget, and the lengthening of all Jubilee the last three years has been recognised by our line trains through a seventh car that delivered customers in high customer satisfaction scores, 17% more capacity. Both of these projects sit and our peers in the rail industry. In addition to outside the core PPP contracts, but were delivered a special award for the rapid recovery from the with Tube Lines to time and to budget. Tube Lines events of 7 July 2005, London Underground was are on course to deliver a third of their entire named ‘Train Operator of the Year’ at the HSBC station enhancement programme this year. Tube Rail Business Awards in February this year. While Lines have proved they can deliver projects. 4.

Metronet are not without accomplishments as well. High profile failures since the year end only serve After initial problems, Metronet are now delivering to emphasise the level of turnaround required by the refurbishment of the District line fleet on Metronet, particularly on track maintenance. The schedule. This is encouraging because the work is failure of Metronet during the third year to properly being done by Bombardier at their facility in Derby prepare sections of the District line track for that will be asked to deliver new trains for the summer temperatures led to a series of disruptive Victoria line and the sub-surface lines. speed restrictions in May, while just a month earlier, LU issued an Emergency Direction to Nonetheless the Infracos continue to disappoint Metronet in response to concerns over the quality in many respects, and failed to meet the two key of track maintenance and renewal on the District challenges set out last year. The challenge to line, which had been growing over a number of Tube Lines was to turn around performance on months.2 More recently still, disruptive incidents the Northern line, at least to the standard of the on the Central and Victoria lines, and overruns and Jubilee and Piccadilly. While performance showed asset failures associated with engineering work, some improvement in the third year, it remained highlight the continuing need to focus on delivering significantly worse than benchmark. In December a serviceable railway every morning. last year London Underground issued a Corrective Action Notice (CAN) to Tube Lines for persistent Such incidents completely undermine the progress poor performance on the line over at least a two Metronet is making and our confidence in the year period, which was manifest in repeated track, capability of Metronet’s management. The current signal and rolling stock failures. The CAN is a closure of the Waterloo & City line for works serious contractual measure, the terms of which connected with the upgrade is an acid test of require Tube Lines to restore performance back Metronet’s capability to manage major projects. to at least the contract benchmark in the fourth In the coming months the PPP Arbiter will deliver year. On past form, this will require a significant a report on Metronet’s performance over the past turnaround. The Northern line also suffered a three years. This is a judgement on the extent to disruptive three day service suspension in October which Metronet has acted in an overall economic 2005. This was necessary to undertake full checks and efficient manner, and in line with Good and remedial works, because there was a loss of Industry Practice. It is the first time Metronet has confidence in the trains’ tripcock system itself and triggered a reference to the Arbiter on this question Tube Lines’ ability to ensure adequate maintenance.1 although the contract envisages an annual process.3 The Northern line performance is in sharp contrast Metronet’s accumulated failures on projects raise to the Piccadilly line, where Tube Lines has the spectre of claims, making these proceedings produced significant improvement. critical for all stakeholders. Metronet’s key challenge was to show they are in A material factor in assessing performance, year over control of their renewal programme. We are in the year, is service disruption caused by communications fourth year of the PPP, and still they are behind in a failures. The service suffered from a number of radio number of areas. The station programme is behind, failures in the third year, and there have been further with only 14 stations delivered (all late) out of 35 due examples in the last few months. LU’s various train by March 2006. Financial penalties are being levied, radio systems are maintained with minor exceptions and we have issued Corrective Action Notices to under a Private Finance Initiative (PFI) that lies outside Metronet BCV and Metronet SSL for their repeated of the PPP. That PFI, Connect, existed before TfL failures in delivering the station programme.

1. The ‘tripcock’ is a train borne failsafe designed to stop the train in the event that it passes a signal set to danger. The Northern line events are covered in chapters 3 and 8. At the time of writing, attribution of the tripcocks incident has not been resolved. 2. Emergency Direction is a contractual step whereby for safety reasons, LU oversee and direct the activities of an Infraco with regard to a set of specific circumstances. 3. Chapter 7 describes the role of the Arbiter and the Metronet annual report process in more detail. The review is a provision unique to the Metronet contracts that enables Metronet to ask for guidance in every contract year. London Underground and the PPP: the third year 2005/06 5.

assumed control of LU, and it was years behind in So I am sorry to have to lay down the same installing a new radio system. We have changed the challenges to the Infracos as I did a year ago. management and recovered the schedule to the Tube Lines: sort the Northern line and bring extent that installation is finally taking place, and the performance up to an acceptable standard. system will be brought into service, line by line, over Metronet: overcome the delays on your renewal the coming year. However, since the events of 7/7, programme, and competently and consistently we have changed our operating rules so that trains deliver what was promised, without burdening are withdrawn from passenger service whenever the us with delay or additional costs. legacy radio system fails. This has introduced a new So often, attention is given to the ‘service fixer’ level of service disruption that was not seen in prior and not to the engineer or operator who simply years, and has for example, resulted in some lengthy turns out good performance day after day. This is partial line suspensions that would not have been symptomatic of a mindset that sees failure as an directed in previous years. inevitability rather than something intolerable that Train radio failures are not the responsibility of the we must drive out. Tube Lines and Metronet must Infracos, but for those assets under their control, improve maintenance and asset performance not the Infracos generally continue to run behind the only for the good of current performance, but also expectations in their bids, though there are some because the delivery of the line upgrades will be notable exceptions. For each Infraco performance hopelessly muddled and disruptive unless the is up in some areas and down in others, and performance of the existing assets is stabilised achievements in one area provide no guarantee of and consistent. Given the level of expenditure achievements elsewhere. This lack of consistency over the past three years, everyone should expect in Infraco performance is a source of great acceleration in the rate of improvement, and frustration. The key to running a successful railway an absence of the crippling asset failures that is to get the basics right, consistently, day after continue to plague the system. day. For the Infracos this means providing high London Underground overall has shown remarkable quality maintenance and project delivery to time, recovery from the events of last July. Ridership levels budget, scope and quality. have recovered, customer satisfaction has remained Customers are frustrated by the inconsistency high and overall delays are reducing. There is however across the Infracos, which means progress on still so much more to do – recent asset failures particular lines is obscured by daily failures across highlight that all too clearly. We have to continue the network as a whole. Statistics tell one story, to progress the Investment Programme, both the but daily experience of inconsistent performance elements in the PPP itself, and major projects outside. makes it difficult to credit improvements. With the commencement of more works associated with the line upgrades, we have to focus on reliability, That frustration leads to our concern for the step up communication activity on closures, future: unless existing assets are maintained to a and ensure different upgrade works are properly higher standard that yields a more stable operating integrated. The Tube is too important to London for environment, the coming line upgrades will be the PPP to be allowed to fail. LU, the Infracos, their hopelessly disruptive. Line upgrades are extremely shareholders, and government must all recognise their complex projects that will tax the skills of the role in this. In the coming year we must all build on Infracos, their suppliers and LU. If the existing the successes and overcome the failures. network is failing at the same time as we are installing the new system and addressing the Tim O’Toole, Managing Director London Underground Ltd, July 2006 inevitable design deficiencies, we shall face even worse levels of disruption. 6.

2.0 comparisons. Last year’s report concluded that overall performance was not good enough and set Background out key challenges for both Metronet and Tube Lines to achieve in the coming year. This report follows up on those challenges. The PPP contracts are largely output specified – defining levels of performance with the expectation that the private sector Infracos will optimise against whole life cost and risk to deliver the maintenance and investment necessary to achieve (and exceed) performance targets. The performance specification provides targets and financial incentives to maintain, renew and enhance the infrastructure to London Underground and industry standards, while leaving The London Underground Public-Private Partnership the precise technical solution to the Infracos. The (PPP) contracts are among the largest and most four-weekly payments to the Infracos are adjusted complex private finance arrangements in the UK according to the level of performance, with bonuses public sector. The Government intended the PPP awarded or abatements applied. to overcome the Underground’s asset investment backlog accumulated throughout the post-war The Government put the three PPP contracts out period, restore the system to a state of good repair, to competitive tender with the expectation that the and deliver benefits to customers through improved bidders would demonstrate a capability to deliver reliability, increased capacity and a better travelling and exceed the contract benchmarks, and deliver environment. London Underground Ltd, part of the significant benefits to LU’s customers. Mayor of London’s transport authority, Transport It is the PPP contracts, rather than the bids, that for London (TfL), is responsible for safety, managing determine the level of payment due to the Infracos the PPP contracts, and staffing and operating the 1 over the first 7 ⁄2 years. However, the bids indicated 4 Underground on a day to day basis. The three the levels of asset performance expected and private sector PPP infrastructure companies works to deliver improved performance in the first (Infracos) are responsible for maintenance and 1 7 ⁄2 years. The bids therefore set expectations and renewal of most of the Underground’s assets provide a baseline against which performance under their 30-year, performance based contracts. should be assessed. This is particularly important 1 It is now three years since the PPP contracts were as we approach the 7 ⁄2-year review period, since signed. The JNP contract was placed with the Tube we must ensure that works promised in the bids Lines consortium (then comprising Bechtel, Amey are not simply pushed into subsequent contract and Jarvis) on 31 December 2002. The BCV and SSL periods and used to justify increases in subsequent contracts were placed with the Metronet consortium contract period price levels. As it is, the structure on 4 April 2003.5 of the PPP agreed by Government sees a significant step-up in the base level of payments after the This report sets out London Underground’s 1 first 7 ⁄2 years. assessment of the PPP at the end of the third year of the contracts, 2005/06. The format of this report The Infracos are also required annually to produce and the presentation of data is intentionally similar nine-year plans setting out their approach to their to last year’s report to allow the reader to make contractual obligations. In this report we review

4. TfL assumed control of the operating company, London Underground Limited, on 15 July 2003. 5. The JNP contract covers the Jubilee, Northern and Piccadilly lines; the BCV contract covers the Bakerloo, Central, Victoria and Waterloo & City lines, and the SSL contract covers the sub-surface lines (Circle, District, Metropolitan, Hammersmith & City and East London). Refer to chapter 7 below for details of the consortia members. London Underground and the PPP: the third year 2005/06 7.

actual performance against the various iterations With continued public interest in the London of these plans as well as the original baseline Underground PPP, this report is intended to set out provided by the bids. The Infracos are obliged to LU’s own assessment of the Infracos’ performance act in an economic and efficient manner, applying at the end of the third year – that is 10% of the life Good Industry Practice in their activities. They of the contract. The following chapters discuss must demonstrate this to LU through their plans how Metronet and Tube Lines are performing in and behaviour. terms of the contractual measures, underlying asset performance, and progress on renewals and upgrades. The works expected under the PPP are essential to We also review the Infracos’ efforts to introduce restoring London’s transport system to a state of whole life asset management, financial and safety good repair, and bringing about some enhancement. performance, and the wider Investment Programme. In addition to the PPP, London Underground is also The final chapter sets this report in the context of undertaking a large programme of works as part LU’s overall performance. of Transport for London’s five-year Investment Programme to tackle challenges such as step free access and station congestion. This report therefore also discusses progress in this vital area. Given the scale of the challenge and long lead times on many of these projects, investment must continue through and beyond the five-year investment programme to achieve the level of improvement required. 8.

3.0 There are other elements of the performance regime in addition to availability, capability and ambience, PPP contractual notably Service Points, which are levied for failure to performance meet certain obligations such as avoiding engineering overruns. This chapter reviews Infraco performance in the third year of the PPP against these four main contract measures.

3.1 Availability Availability is essentially a reliability measure reflecting whether assets are available for customer service. The measure counts delays and disruptions lasting more than two minutes and takes into account the duration, location and time of day of The PPP contracts are output-based, meaning that the disruption to estimate the total cost in terms they specify performance outcomes rather than of customer time. technical inputs. The contracts include an extensive performance regime with bonuses and abatements This is expressed as ‘lost customer hours’ (LCH). that provide financial incentives. The principal For example, a 2-minute delay at Victoria in the contractual measures are: morning peak costs significantly more lost customer hours than a 2-minute delay on a Sunday evening in • Availability: a measure of day-to-day reliability the suburbs. At signature the contract benchmarks based on whether assets are available for service were set at approximately 5% worse than historic • Capability: a measure of what the assets are LU performance for the first year of the contract, capable of delivering in terms of capacity and becoming more challenging in subsequent years. reduced customer journey time The agreed lost customer hour performance • Ambience: a measure of the quality of the aggregated for the three Infracos improved by travelling environment 10% against the previous year. However, overall availability was strongly affected by the ‘tripcock’ Each of these measures has a contractual problems on the Northern line in October 2005 benchmark level, with bonuses being available (discussed below). Including the 1.8 million lost for better performance and financial penalties customer hours arising from the tripcock problem (abatements) charged if performance is worse than and other incidents still in abeyance, availability benchmark. An implicit expectation within the PPP worsened by 11% against the previous year.6 is that performance will improve over time and earn Infracos bonuses. Benchmark performance Despite a 6% improvement in rolling stock lost represents a minimum, rather than ‘world class’ customer hour performance over the last year, rolling performance. London Underground is looking for stock remains the biggest cause of lost customer levels of performance significantly better than hours, accounting for 48% of the total. Train control benchmark. It is evident from the Metronet systems including signalling remain the second and Tube Lines bids that the Infracos assumed biggest cause (30%) and worsened slightly in the last performance better than benchmark. year. Unfortunately the improvement on rolling stock was partly offset by a 16% increase in stations, lifts and escalators lost customer hours.

6. These totals include lost customer hours ‘in abeyance’, where the accountable party is still being determined. It is normal to have a larger number of ‘abeyance LCH’ in the most recent three 4-week periods, and this can be seen in the charts in this section. At the time of writing, lost customer hours due to the tripcock problem are in abeyance. Percentages and year-on-year comparisons are based on LU Cause Codes to ensure consistency and comparability. London Underground and the PPP: the third year 2005/06 9.

Overall Availability Lost customer hours attributable to Infracos Including lost customer hours in abeyance, lost customer hours attributed to the Infracos totalled 3,000

15.6 million in 2005/06 compared to 14.1in 2004/05. 2,500 Excluding the Northern line tripcock effect, the total for

s (000) 2,000

2005/06 would be 13.8 million lost customer hours. ur ho r Including lost customer hours in abeyance (but 1,500 stome excluding ‘tripcocks’ on the Northern line), most u 1,000 lines performed better than benchmark over the Lost c year, with the best being the Piccadilly line (56% 500 better than benchmark) and the worst being the 0 12345678 91011121312345678 9 10111213 Waterloo & City and Northern lines (66% and 48% Period 2004/05 – 2005/06 worse than benchmark, respectively). Agreed LCH Abeyance LCH Bid

Availability % variance to benchmark Metronet BCV – availability (including abeyance) Average lost customer hours (LCH) per period 2005/06

80 250,000

60 200,000 40 d io r 150,000 20 pe r iance

r 0 100,000 LCH pe

% Va -20 50,000 -40 0 -60 Bakerloo Central Victoria Waterloo & City -80 Contract benchmark 57,500 224,400 117,500 4,800 Financial year 2005/06 Bid projection 48,749 157,950 88,642 3,804 Bakerloo Central District East London Jubilee Achieved (Agreed) 45,224 185,102 123,521 5,409 Metropolitan, Circle, Hammersmith & City Northern Piccadilly Victoria Waterloo & City Achieved (Abeyance) 7, 4 82 17,754 13,217 2,542

Metronet SSL – availability Tube Lines (JNP) – availability Average lost customer hours (LCH) per period 2005/06 Average lost customer hours (LCH) per period 2005/06

350,000 350,000

300,000 300,000

250,000 250,000 d d io io r 200,000 r 200,000 pe pe r r 150,000 150,000

LCH pe 100,000 LCH pe 100,000

50,000 50,000

0 0

District Met, Circle and H&C East London Jubilee Northern Piccadilly Contract benchmark 189,300 286,500 2,900 Contract benchmark 90,262 100,569 172,150 Bid projection 150,082 227,650 2,576 Bid projection (adj.) 82,887 95,650 149,246 Achieved (Agreed) 153,253 172,945 1,869 Achieved (Agreed) 81,229 129,023 62,721 Achieved (Abeyance) 5,707 6,334 0 Achieved (Abeyance) 20,454 158,287 11,667 10.

Metronet BCV Generally, Metronet BCV’s availability performance for the year was on or around the benchmark level, though agreed lost customer hour performance remains some 20% below Metronet’s bid expectations. The Central line was the best performer, with a 16% improvement in agreed lost customer hours on 2004/05, making it 18% better than benchmark overall. The improvement is particularly noticeable in the second half of the year, and is mainly due to a 20% reduction in rolling stock failures, which offset a 36% increase in signalling related lost customer hours. An important factor in the rolling stock improvement was the policy of having the bid projection. Overall availability performance Metronet train maintainers debriefing LU train remained largely unchanged from the previous year, operators on return to depot – we would like to with agreed lost customer hours of 5% worse than see this approach adopted across the lines. benchmark. Improvements in track and station availability performance were offset by rolling stock The Bakerloo line finished the year 21% better than and train control failures, which increased 15% and benchmark and 7% better than bid. However, mainly 12%, respectively. as a consequence of a small number of large incidents (including a disruptive escalator failure Mainly as a consequence of track problems, Waterloo at Piccadilly Circus), overall agreed lost customer & City line agreed lost customer hours were 13% hours increased by 11% against the previous year. worse than benchmark and 42% worse than bid. Availability on the Victoria line continues to be Despite some areas of improvement, Metronet BCV disappointing, with agreed lost customer hour has not continued the general improvement of the performance for the year being 39% worse than second year through the third.

Bakerloo line Bakerloo line Lost customer hours (000) Bonus / (Abatement) £000

100 100

90 80

80 60

70 40

60 20

s (000) 50 0 £000

ur 12345678 91011121312345678 9 10111213

Ho 40 (2)

30 (40)

20 (60)

10 (80)

0 (100) 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Contractural measure Benchmark Bonus Abatement and thePPP:third year 2005/06 London Underground Lost c Lost c Victo Lost c Cent Wate Hours (000) Hours (000) Hours (000) A A A g g g ree ree ree r r r al line 200 250 300 350 400 450 500 200 300 400 500 600 100 150 100 u u u loo &Cityline ia line d d d 20 25 50 10 15 stome stome stome 0 5 0 0 Pe Pe Pe Abey Abey Abey 1234567 1234567 1234567 r r r io io io d d d a a a r r r nce nce nce 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 ho ho ho ur ur ur s (000) s (000) s (000) Contr Contr Contr a a a ct ct ct 8 8 8 u u u r r r a a a 9101112131234567 9101112131234567 9101112131234567 l me l me l me a a a s s s u u u eBenchm re Benchm re Benchm re a a a rk rk rk 8 8 8 101112139 101112139 101112139 Bon Bon Victo Bon Cent Wate £000 £000 £000 Bon Bon Bon u u u (1400) (1200) (1000) r u u u s /(Abatement)£000 s /(Abatement)£000 s /(Abatement)£000 ( (600) (400) (200) (350) (300) (250) (200) (150) (100) r (100) r 8 al line 200 400 s s s 100 ( (60) (40) (20) (50) loo &Cityline ia line 00) 8 20 50 0) 0 0 0 Ab Ab Ab Pe Pe Pe 1234567 1234567 1234567 a a a r r r io io io tement tement tement d d d 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 8 8 8 9101112131234567 9101112131234567 9101112131234567 8 8 8 101112139 101112139 101112139 11. 12.

District line District line Lost customer hours (000) Bonus / (Abatement) £000

400 500

350 400

300 300 250 200

s (000) 200 £000 ur 100 Ho 150 0 100 12345678 91011121312345678 9 10111213

50 (100)

0 (200) 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Contractural measure Benchmark Bonus Abatement

Metropolitan, Circle and Hammersmith & City lines Metropolitan, Circle and Hammersmith & City lines Lost customer hours (000) Bonus / (Abatement) £000

450 600

400 500 350

300 400

250

s (000) 300 £000 ur 200 Ho 150 200

100 100 50

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Contractural measure Benchmark Bonus Abatement

East London line East London line Lost customer hours (000) Bonus / (Abatement) £000

10 10

9 8 8 6 7 4 6

s (000) 5 2 £000 ur

Ho 4 0 12345678 91011121312345678 9 10111213 3 (2) 2 (4) 1

0 (6) 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Contractural measure Benchmark Bonus Abatement London Underground and the PPP: the third year 2005/06 13.

Metronet SSL Tube Lines Of the three Infracos, Metronet SSL is the only Tube Lines third year performance is dominated by one to achieve better than benchmark availability ongoing poor performance on the Northern line. scores for all of its lines. Aggregate agreed lost This detracts from other areas of improvement, customer hour performance was 14% better than such as the continued improvement on the Piccadilly bid in the third year. However the year-on-year line performance. comparison shows a deterioration of 12% in Although Northern line agreed lost customer hour agreed lost customer hours. performance improved by 31% from the previous District line agreed lost customer hour performance year, it remained 28% worse than benchmark and worsened by 16% and is 2% worse than bid. This was 35% worse than the bid. Tube Lines have been caused by a combination of signalling, track and rolling abated on Northern line availability for all but 2 of stock problems. The Metropolitan, Hammersmith & 26 four week periods to March 2006. City and Circle line grouping recorded a deterioration These figures do not include the 1.8m lost customer of 7% in agreed lost customer hours compared to hours associated with the Northern line ‘tripcock’ the previous year. Again track and signals failures problem, which remain, at present, in abeyance. The are a major contributing factor to this. Rolling stock tripcock is part of system that automatically brings availability however improved, and the overall agreed a train to a halt in the event of passing a signal at lost customer hour performance for these lines danger. Repeated failures leading to the loss of remains 24% better than bid and 40% better than confidence in the integrity of this system, resulted benchmark. However, no one should have expected in the withdrawal of the Northern Line train service performance to worsen in the third year of PPP from the evening of Wednesday 12 October 2005 investment. through to late on Saturday 15 October 2005, when The East London line has a very small effect on the a very limited service resumed. overall Metronet SSL total, but it was the only line to Persistent availability performance below benchmark show improvement on the previous year. The 34% led LU to serve a Corrective Action Notice (CAN) reduction in agreed lost customer hours and resulted on Tube Lines. This is a contractual remedy served from significant improvements in availability of rolling when an Infraco has defaulted in the performance stock and track and civils assets. of its obligations under the PPP Contract. It requires the Infraco to undertake corrective action to remedy the default(s) set out in the CAN, within 14. Lost c Lost c No J Picca Lost c Hours (000) Hours (000) Hours (000) u bilee line A A A r g g g the ree ree ree d 200 250 300 350 400 200 250 200 100 150 100 150 100 120 140 160 1 u u u d d d illy line 50 50 20 40 60 8 8 r stome stome stome 0 0 0 0 0 n line Pe Pe Pe Abey Abey Abey 1234567 1234567 1234567 r r r io io io d d d a a a r r r nce nce nce 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 ho ho ho ur ur ur s (000) s (000) s (000) Contr Contr Contr a a a ct ct ct 8 8 8 u u u r r r a a a 9101112131234567 9101112131234567 9101112131234567 l me l me l me a a a s s s u u u eBenchm re Benchm re Benchm re a a a rk rk rk 1, 8 8 8 8 07 in 101112139 101112139 101112139 a bey a nce Bon No Bon J Picca Bon £000 £000 £000 u bilee line Bon Bon Bon r the u u u (1400) (1200) (1000) u u u s /(Abatement)£000 s /(Abatement)£000 s /(Abatement)£000 (250) (200) ( (600) (400) (200) (500) (450) (400) (350) (300) d (150) (100) 8 200 250 300 350 400 450 500 200 s s s 100 100 150 (50) 00) illy line 50 50 r 0 0 0 n line Ab Ab Ab Pe Pe Pe 1234567 1234567 1234567 a a a r r r io io io tement tement tement d d d 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 8 8 8 9101112131234567 9101112131234567 9101112131234567 8 8 8 101112139 101112139 101112139 London Underground and the PPP: the third year 2005/06 15.

the time limits specified by LU. This CAN relates to Tube Lines’ poor availability performance, incorporating failures in all asset areas including rolling stock, track and signals over two years to June 2005, resulting in a level of availability performance at least worse than benchmark. In 15 out of the 26 four-weekly payment periods, availability performance was at a level worse than that specified as ‘unacceptable’ in the contract. Tube Lines compliance with the terms of the CAN is being actively monitored, and will continue to be so until all the terms are met. Failure to meet the terms of the CAN could lead to LU using further, even more serious, contractual remedies. Performance on the Northern line has shown some signs of improvement since the imposition of the 3.2 Capability CAN, particularly since February. Whereas availability is about day-to-day performance, capability is a longer-term measure of the potential Jubilee line agreed lost customer hour performance capacity of the assets to reduce the journey time for the year was 10% better than the benchmark, experienced by the customer. Improved capability 9% better than the previous year, and 2% better can be achieved through having more trains, or faster than the Tube Lines bid. There are however, a large trains (through train or signalling systems), or trains number of lost customer hours for the Jubilee line with more capacity, or some combination of these. still in abeyance which, depending on the outcome of the attribution process, could result in third year The PPP contracts set out requirements for availability performance for the line being both significant improvements in capability. It is for worse than benchmark and bid projections. While the Infracos to decide on the combination of some asset categories, notably fleet and signals, measures to achieve the targets. The long lead showed improvement, continuing station problems times involved in procuring these line upgrades (including lift and escalators) adversely affected the with new signalling and/or rolling stock mean overall performance. that most of the upgrades are not due until the 1 second 7 ⁄2 year period of the contract. The Piccadilly line continued to improve with third year agreed lost customer hour performance being In the first contract period, it is possible to 39% better than the previous year, 64% better than achieve small capability improvements on most benchmark and 58% better than bid. This continued lines, for example by increasing the effective fleet improved performance of the Piccadilly line is a size available for service (through more efficient result of substantial additional investment and maintenance and management of spare trains) improved management by Tube Lines, and the or by addressing the causes of certain speed overall improvement against year one is significant. restrictions that act as constraints on line The approach to improvement on the Piccadilly line capacity. Only the Waterloo & City finished the is indicative of what LU would like to see from year incurring capability abatements; all other Tube Lines and Metronet across all the lines. lines are in bonus. 16. than bid. thanbenchmark,butworse performance isbetter through theintroductionofanextratrain.Overall speed limits.Bakerloo lineperformance improved withinoverall stations, existing between certain the signallingtoraise theaverage andtopspeeds trainsandchangesto peak train,two off-peak line capability improved asaresultofanextra the removal ofseveral speedrestrictions.Victoria trainsaswell as peak trains,nineextraoff-peak improved duetotheintroductionoffour extra service. OntheCentralLine, capability performance higher numberoftrainsavailable for scheduled improvements, mainly asaresultofdeclaring The otherMetronetBCVlinesachieved addressed throughthecurrentlineclosure. restrictions ontheline,whicharenow being projections duetotheintroductionofthreespeed the year wasworse thanbenchmarkandthebid Waterloo &Citylinecapability performance for Metronet BCV Min Bake Minutes Act u 16.40 16.20 16.30 16.60 16.70 16. 16.00 16.50 r ua 16.90 tes 17.00 16.10 loo linecapability l perform 8 0 Pe 1234567 r io a d nce 2004/05–2005/06 Contr a ct benchm 8 9101112131234567 a rk 8 101112139 Bon A Met Bake

£000 ggr Bi Contr Bon Achieve d u r e projection r onet BCV –capability u s /(Abatement)£000 loo linecapability g s a 10 12 14 16 ate capability2005/06 ct benchm 0 2 4 6 8 d Ab Pe Minutes 1234567 a r io tement 24.00 20.00 22.00 23.00 14.00 16.00 1 19.00 13.00 15.00 21.00 17.00 8 d .00 a 2004/05–2005/06 rk Bake 16.77 16.7 16. 8 r 2 8 o Cent loo 8 9101112131234567 22.93 22.29 23.45 r lVicto al 16. 16.5 17.1 8 4 r aWate ia 8 14.71 14.49 14.49 101112139 r loo &City and thePPP:third year 2005/06 London Underground Min Min Victo Min Cent Wate Minutes Minutes Minutes Act Act Act u u u 22.00 22.50 24.00 24.50 23.00 23.50 25.00 14.30 14.50 14.70 16.50 16.60 16.70 16. 13.50 13.70 15.30 15.50 ua ua ua 16.90 14.90 13.90 r tes tes tes 17.00 17.20 17.30 17.40 17.50 14.10 15.10 17.10 r r al linecapability loo &Citylinecapability ia linecapability l perform l perform l perform 8 0 Pe Pe Pe 1234567 1234567 1234567 r r r io io io a a a d d d nce nce nce 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 Contr Contr Contr a a a ct benchm ct benchm ct benchm 8 8 8 9101112131234567 9101112131234567 9101112131234567 a a a rk rk rk 8 8 8 101112139 101112139 101112139 Bon Bon Victo Bon Cent Wate £000 £000 £000 Bon Bon Bon u u u r u u u s /(Abatement)£000 s /(Abatement)£000 s /(Abatement)£000 (400) (300) (200) (100) r r al linecapability 500 600 200 300 400 700 200 250 300 350 s s s 100 100 150 (40) (35) (30) (25) (20) loo &Citylinecapability (15) (10) ia linecapability 50 (5) 0 0 0 Ab Ab Ab Pe Pe Pe 1234567 1234567 1234567 a a a r r r io io io tement tement tement d d d 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 8 8 8 9101112131234567 9101112131234567 9101112131234567 8 8 8 101112139 101112139 101112139 17. 18.

Northern SSL line capability Northern SSL line capability Minutes Bonus / (Abatement) £000

28.00 400

350

27.50 300

250 tes

u 27.00 200 £000 Min 150

26.50 100

50

26.00 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual performance Contract benchmark Bonus Abatement

Southern SSL line capability Southern SSL line capability Minutes Bonus / (Abatement) £000

30.00 45

40

35 29.50 30

25 tes

u 29.00 £000 20 Min

15 28.50 10

5

28.00 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual performance Contract benchmark Bonus Abatement

East London line capability East London line capability Minutes Bonus / (Abatement) £000

24.00 7

6

23.50 5

4 tes

u 23.00 £000

Min 3

2 22.50

1

22.00 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual performance Contract benchmark Bonus Abatement London Underground and the PPP: the third year 2005/06 19.

Metronet SSL Tube Lines Metronet SSL delivered small capability Tube Lines delivered capability improvements on improvements on all their lines during the year. the Northern and Jubilee lines during the third year. This was mainly achieved through asset works to Capability on the Piccadilly line remained unchanged. remove speed restrictions; in addition the number Overall performance is better than both the of trains made available for Circle line service was benchmark and the Tube Lines bid. increased. Overall capability performance on the The capability improvements on the Northern line sub-surface lines was better than benchmark but relate to improvements in permissible line speeds, slightly lower than the projections in Metronet’s through the removal of speed restrictions and bid for the Metropolitan, Hammersmith and signalling adjustments. The increase in capability on Circle lines. the Jubilee line was achieved through lengthening the trains from six to seven car formations. Tube Lines were contracted by LU to bring forward these works, and hence were paid directly rather than through the capability mechanism.

Metronet SSL – capability Tube Lines (JNP) – capability Aggregate capability 2005/06 Aggregate capability 2005/06

31.00 28.00 27.00 29.00 26.00 25.00 27.00 24.00 23.00 tes tes 22.00 u 25.00 u 21.00 Min Min 20.00 23.00 19.00 18.00 21.00 17.00 16.00 19.00 15.00

Northern SSL Southern SSL East London Jubilee Northern Piccadilly Contract benchmark 27.08 29.54 23.11 Contract benchmark 20.89 22.06 26.50 Bid projection 26.64 29.51 23.11 Bid projection 20.89 21.99 26.61 Achieved 26.78 29.49 22.63 Achieved 20.89 21.78 26.35 20.

Jubilee line capability Jubilee line capability Minutes Bonus / (Abatement) £000

22.00 1.0

0.9

0.8 21.50 0.7

0.6 tes

u 21.00 0.5 £000 Min 0.4

0.3 20.50 0.2

0.1

20.00 0.0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual performance Contract benchmark Bonus Abatement

Northern line capability Northern line capability Minutes Bonus / (Abatement) £000

23.00 200

180

160 22.50 140

120 tes

u 22.00 100 £000 Min 80

60 21.50 40

20

21.00 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual performance Contract benchmark Bonus Abatement

Piccadilly line capability Piccadilly line capability Minutes Bonus / (Abatement) £000

27.00 90

80

70 26.50 60

50 tes

u 26.00 £000 40 Min

30 25.50 20

10

25.00 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual performance Contract benchmark Bonus Abatement London Underground and the PPP: the third year 2005/06 21.

3.3 Ambience Metronet SSL’s improvement predominantly Customer surveys consistently show that tube derives from the successful graffiti initiative on customers value the quality of their travelling time the train fleet. as well as the reduction in the quantity of time Tube Lines achieved the most impressive contribution taken. The ambience measure reflects this by to improved ambience through the successful measuring the quality of the travelling environment deployment of protective plastic film on Jubilee line on trains and in stations based on a quarterly train windows to prevent internal scratched graffiti. Mystery Shopping Survey (MSS) conducted by The MSS scores for scratched graffiti show a an independent accredited survey organisation. significant 30-point improvement in the fourth quarter The survey assesses various aspects of the service, on the Jubilee line and preliminary data for the first including: the condition of train seats, cleanliness quarter of 2006/07 suggests further improvements. of surfaces and train exteriors, levels of litter and Given the obvious success of this initiative, we now graffiti, public address audibility, ride quality and expect all three Infracos to undertake similar work in-car noise; lighting, train heating and ventilation; across the entire LU fleet. quality of signage, and condition of toilets and waiting rooms. The benchmarks were set at levels Train internal scratch graffiti ambience better than historic LU performance and apply at Infraco rather than line level. 70 60 Ambience was an area of mixed performance in the third year of PPP, with improvements for Tube 50 e Lines and Metronet SSL, and deterioration on r 40 30

Metronet BCV. All three Infracos are performing MSS sco better than benchmark, and aggregate ambience 20 performance in the fourth quarter of the year 10 represented the best Infraco performance since 0 transfer. In all cases actual performance is still 0405 Q1 0405 Q2 0405 Q3 0405 Q4 0506 Q1 0506 Q2 0506 Q3 0506 Q4 Quarter lower than the bid expectation, though more so Bakerloo Central District East London Hammersmith & City for the two Metronet Infracos. Jubilee Metropolitan Northern Piccadilly Victoria

Average Infraco ambience performance Metronet BCV – ambience Average MSS score 2005/06

74 76.0

73 74.0

72 72.0 e 71 r 70.0 e r 70 68.0 MSS sco

MSS sco 69 66.0

68 64.0

67 62.0 Aggregate Infraco Bakerloo Central Victoria 66 12345678 91011121312345678 9 10111213 Contract benchmark 68.0 Period 2004/05 – 2005/06 Bid projection 73.4 73.9 73.4 73.0 Average Infraco ambience Station ambience Trains ambience Average Infraco bid Achieved 68.5 68.8 69.2 66.9 22.

Metronet SSL – ambience Tube Lines (JNP) – ambience Average MSS score 2005/06 Average MSS score 2005/06

78.0 78.0

76.0 76.0

74.0 74.0 e e r 72.0 r 72.0 70.0 MSS sco MSS sco 70.0 68.0

66.0 68.0

64.0 66.0

Aggregate Infraco District Met/Cir/H&C East London Aggregate Infraco Jubilee Northern Piccadilly Contract benchmark 70.0 Contract benchmark 71.0 Bid projection 74.7 73.4 76.4 69.2 Bid projection 72.1 76.3 71.0 70.8 Achieved 71.4 72.6 69.8 71.1 Achieved 71.8 76.7 69.6 71.1

3.4 Service Points Metronet BCV performance showed an improving Service points are allocated for failures by the trend, but remained worse than threshold for Infracos to meet certain contractual obligations, the majority of the year. Metronet SSL showed typically: deterioration compared to 2004/05. The contract thresholds reduce year-on-year to incentivise • Facilities faults: failure of customer facing improving performance but as yet there has been assets such as CCTV, public address systems, no sign of sustained improvement in facilities train arrival indicators or help points. performance from any of the Infracos. • Fault rectification: failure to fix certain problems Performance on fault rectification has been better. such as litter and spillages, defective escalators, Metronet BCV avoided abatement with overall pumps and drains within the standard clearance performance better than the contract threshold. times set out in the contract. Tube Lines fault rectification performance was • Engineering overruns: failure to return the better than threshold throughout the year with railway for operational use on time following some evidence of an improving trend. Metronet engineering work. SSL incurred abatements for half the year, with performance a marked 59% worse than 2004/05. For the first two categories each Infraco has a The performance of both Metronet Infracos service point threshold, above which abatements deteriorated in the last part of the year. are charged.7 The threshold for engineering overruns is zero reflecting the severe effects these events The Metronet Infracos have noticeably higher have on customer service. average fix times for cleaning, and ‘civils’ faults such as track and premises, while Tube Lines take longer to fix electrical and mechanical Facilities faults and fault rectification faults such as lighting, pumps and drains and Overall facilities performance continues to be worse communications equipment. than the defined contract thresholds. Tube Lines’ facilities performance was worse than threshold all year, and worse than the previous year.

7. In this section performance is compared to the contractual threshold and not the expected bid service point values as the latter did not form part of the bid matrices. Both Metronet and Tube Lines are incurring less abatements for Facilities and Fault Rectification than the values set out in Annex 5 to Schedule 1.9 of the PPP contracts. London Underground and the PPP: the third year 2005/06 23.

8 Metronet BCV Metronet BCV Facilities service points Fault rectification service points

10,000 40,000

9,000 35,000 8,000 30,000 7,000 25,000 6,000

5,000 20,000

4,000 15,000 3,000 10,000 2,000 5,000 1,000

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual Threshold Actual Threshold

Metronet SSL Metronet SSL Facilities service points Fault rectification service points

10,000 50,000

9,000 45,000

8,000 40,000

7,000 35,000

6,000 30,000

5,000 25,000

4,000 20,000

3,000 15,000

2,000 10,000

1,000 5,000

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual Threshold Actual Threshold

Tube Lines (JNP) Tube Lines (JNP) Facilities service points Fault rectification service points

16,000 45,000

14,000 40,000

35,000 12,000 30,000 10,000 25,000 8,000 20,000 6,000 15,000 4,000 10,000

2,000 5,000

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual Threshold Actual Threshold

8. There remains a backlog of incident data from Metronet BCV Fault Report Centre that has not been transferred to the CuPID performance and payment database due to differences on coding affecting periods 9-13. 24.

Fault rectification Average fix time during 2005/06

Toilets

Public address

Mobility impaired lifts

Help points

Dot matrix indicators

Clocks

Cleaning audit

CCTV

Track

Signalling

Pumps and drains

Premises and structures

Power and electrical

Mechanical services

Litter and spillage

Lighting

Lift, escalator and customer convey

Comms equipment

Other cleaning

Alarm, safety and control

0123456 Average time to fix in days SSL JNP BCV London Underground and the PPP: the third year 2005/06 25.

Engineering overruns before services can resume), and failing to check Last year’s report highlighted concerns regarding that teams have the right tools, parts and spares the rate of engineering overruns following planned before starting work. engineering works. Any delay jeopardises service In the last year there has been an increase in and service reliability during the morning peak, the volume of work undertaken, which might be which is the period of most intense Tube usage. thought an explanation for more overruns. Any such The number of engineering overruns increased again explanation would be unacceptable because, through in the third year to a total of 207, i.e. an average of the greater volume of work, the Infracos should nearly four per week. This is 3.5% up on last year become expert at planning to avoid ongoing overruns. and nearly 40% up on the first year of PPP. With the development of the line upgrades, which will soon mean regular testing of new trains and signalling Metronet have made progress in reducing the systems during engineering hours, it is essential that number of overruns, with a reduction from 52 to the Infracos understand how to successfully hand 46 for BCV and from 79 to 51 for SSL for the year, back the railway for an undisturbed morning peak. an improvement of 12% and 35% respectively. However this is still unacceptably high, at a rate of Engineering overruns – all Infracos almost one per week for each Metronet Infraco. The number of engineering overruns attributed to 30 8,000 7,000 Tube Lines increased by 46% when compared to the 25 previous year, running at an average rate of two per 6,000

ns 20 week. Although the number of engineering overruns rru 5,000 vice points r ove attributable to Tube Lines increased, and indeed f 15 4,000 se o f r o comprised over half of all overruns, the extent of 3,000 r mbe

u 10 mbe N the impact on customers was less because of a u

2,000 N reduction in the average duration of the overruns. 5 1,000

Many of the overruns are caused by easily avoidable 0 0 12345678 91011121312345678 9 10111213 failures. These include failing to notify the control Period 2004/05 – 2005/06 centre that all persons and equipment are clear of Number of engineering overruns Engineering overrun service points the track (requiring a time consuming track search 26.

Metronet BCV Metronet BCV SP engineering overruns Number of engineering overruns ISC abatements by period

10 0 12345678 91011121312345678 9 10111213 9 (20) 8

7 (40) ns

rru 6 (60) ove f 5 o £000 r (80) 4 mbe u

N 3 (100) 2 (120) 1

0 (140) 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Abatement

Metronet SSL Metronet SSL SP engineering overruns Number of engineering overruns ISC abatements by period

16 0 12345678 91011121312345678 9 10111213 (20) 14 (40) 12 (60) ns

rru 10 (80) ove f 8 (100) o £000 r (120) 6 mbe u

N (140) 4 (160) 2 (180)

0 (200) 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Abatement

Tube Lines (JNP) Tube Lines (JNP) SP engineering overruns Number of engineering overruns ISC abatements by period

16 0 12345678 91011121312345678 9 10111213 (20) 14 (40) 12 (60) ns

rru 10 (80) ove f 8 (100) o £000 r (120) 6 mbe u

N (140) 4 (160) 2 (180)

0 (200) 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Agreed Abeyance Abatement London Underground and the PPP: the third year 2005/06 27.

4.0 example, by positioning their key maintenance personnel at the most operationally sensitive Maintenance parts of the railway. and asset • Daily director level reviews of performance performance involving not only the Infracos, but also their supply chains, the PFI contractors and other suppliers, to focus on improved responsiveness and reliability • Stimulating and supporting a culture of continuous improvement within the supply chain, in pursuit of a sustainable level of reliability with the existing asset base • Focusing suppliers on delivering system Availability, as discussed in the previous chapter, is the resilience during the migration to new key contractual measure of reliability. The performance technology and systems of assets in terms of the frequency of fault or failure, and time to restore, is a crucial driver of the Availability • Raising the profile and requirement for a systems measure, and reliability generally. This chapter reviews integration approach from suppliers the performance of four significant asset categories: The speed at which the Infracos can improve the rolling stock, signalling and control systems, track, railway is determined to a large extent by the level of and lifts and escalators. This type of analysis provides specialist resource they have available. The Infracos an insight into how well the Infracos are doing at have taken steps to invest in this area – Tube Lines’ delivering the basic maintenance that is so crucial to new ‘Signal School’ at Stratford being one example. 9 the reliability of LU’s service. However, they still experience resource shortfalls Given the relationship with availability, it should not in key areas. A particular concern is the number of be surprising that the issues that came out in the last Metronet Technical Officers – maintenance staff chapter are apparent here. Generally, the story is one deployed throughout the network to provide the of improving asset performance, though for all asset first response to failures. categories there is significant variation between lines, and in a number of cases the average duration of 4.1 Rolling Stock failures has worsened despite a reduction in overall Compared to other railways, the LU fleet is in numbers. Only the lift and escalator category has generally poor condition, and rolling stock failures failed to show any significant improvement over the account for more delays than any other asset last year. category. At network level the mean distance To achieve a sustainable level of reliability a train travels between failures (MDBF) showed improvement, good practice asset management an improving trend (8% over 2004/05) but it is must be consistently applied across all areas. necessary to look at individual fleet performance This is not apparent across all three Infracos, and to understand the true position. For example, LU has worked with them to establish consistent the Piccadilly line has seen a 40% improvement, improvement in the following ways: but at the other end of the scale the Northern line fleet performance deteriorated by 18%. • Placing greater emphasis on the delivery issues that have the greatest impact on customers, for

9. The measures used in this chapter are industry standard, rather than contractual metrics, such as Mean Time/Distance Between Failure and the average duration of delays greater than 2 minutes. These give a picture of underlying asset performance but do not show the service impact of failures in the same way as the availability PPP measure. Figures have been calculated using the same methodology, coding rules and data source as for those used in the 2004/05 report. 28.

The various fleets may be characterised as old of maintenance processes, skilled maintenance aged, middle-aged and young. The old aged fleets resources, and continuous involvement of the (those on the Metropolitan, East London, Circle, supply chain. The 18% deterioration in the Victoria and Bakerloo lines) are simpler in design performance of the Northern line is unacceptable than modern fleets, and easier to maintain. The and must be turned around. LU are supporting trains are reaching the end of their useful lives and Tube Lines in this, for example with arrangements require replacement in the medium term, but in the for stabling trains. The Jubilee fleet, which is similar interim, reliability can generally be maintained by in design to the Northern, showed 1% deterioration. paying close attention to detail. (This is particularly The Central showed a 29% improvement. important for the Bakerloo fleet, which is the last Comparing the different fleets on the same chart due for replacement.) These fleets have generally shows that the Piccadilly improvement puts the shown a small improvement in performance over fleet into the same league as the District fleet, the last year, ranging from 2% for the Bakerloo to while the disparity between the performance 22% for the East London (though the latter has a of the Jubilee and Northern line fleets is quite relatively small fleet). apparent. This chart also highlights the relatively The middle-aged fleets on the Piccadilly and poor performance of the Bakerloo fleet when District lines are the first series of trains with compared to the Piccadilly and Victoria stocks, modern electrically controlled emergency braking which are of similar age and design. systems. Being more complex than older stocks, Effective rolling stock maintenance practice these trains require a significant investment in the will become even more important after the line management of maintenance processes, but they upgrades, which will generally see the replacement also exhibit the best MDBF of all the fleets. The of lineside signalling technology with predominantly turnaround on the Piccadilly line has already been train borne signalling systems. Depot maintenance noted, and comes on top of a 56% improvement teams will need to be skilled to deal with the in 2004/05. This shows the effect that can be new approach required, and where new signalling achieved through focused investment and systems are being retrofitted to existing stock management. The District showed an overall (Northern and Jubilee lines) it is even more decline of 6% on 2004/05, although there has important that basic train reliability is fixed first. been a marked improvement in the last part of the year. Rolling stock MDBF – average 2005/06 The younger fleets on the Central, Jubilee (Based on Infraco Cause Codes)

and Northern lines have superior acceleration 16,000

and braking characteristics that enable higher 14,000

frequencies and capacity. They are also designed 12,000

to work with modern, higher capacity, signalling 10,000 es r systems. Accordingly the trains are more complex 8,000

and require major investment in the management Kilomet 6,000

4,000

2,000

0

Bakerloo Central District East London Jubilee Metropolitan, Circle, Hammersmith & City Northern Piccadilly Victoria Waterloo & City Upward trendsshow improvement. Line level between trendsinmeandistance failures. Rolling stockperformance Note: data based onLUNote: data cause codes toallow year-on-year comparison. and thePPP:third year 2005/06 London Underground Cent Mean Wate Mean Kilometres Kilometres Act Act 20,000 10,000 12,000 14,000 16,000 1 10,000 2,000 4,000 6,000 8 8 2,000 4,000 6,000 8 9,000 3,000 5,000 1,000 ua ua 7,000 r r ,000 ,000 ,000 al line– d d loo &Cityline– l l istance between istance between 0 0 Pe Pe 1234567 1234567 6 per. Mov. Av 6 per. Mov. Av r r io io d d r 2004/05–2005/06 2004/05–2005/06 ollin g stock g g . (Act . (Act r ollin f f ua ua ail ail 8 8 l) l) ur ur g 9101112131234567 9101112131234567 stock es (inse es (inse r r vice) vice) 8 8 101112139 101112139 Mean Victo Mean Bake Met Mean Kilometres Kilometres Kilometres Act Act Act 10,000 12,000 10,000 r 2,000 4,000 6,000 2,000 4,000 6,000 8 2,000 4,000 6,000 8 9,000 3,000 5,000 3,000 5,000 1,000 1,000 r opolitan line– ua ua ua 7,000 r ,000 ,000 loo line– d d d ia line– l l l istance between istance between istance between 0 0 0 Pe Pe Pe 1234567 1234567 1234567 6 per. Mov. Av 6 per. Mov. Av 6 per. Mov. Av r r r io io io d d d 2004/05–2005/06 2004/05–2005/06 2004/05–2005/06 r ollin r ollin g r g g g ollin g stock . (Act . (Act . (Act stock f f f ua ua ua g ail ail ail stock 8 8 8 l) l) l) ur ur ur 9101112131234567 9101112131234567 9101112131234567 es (inse es (inse es (inse r r r vice) vice) vice) 8 8 8 101112139 101112139 101112139 29. 30.

District line – rolling stock Circle line – rolling stock Mean distance between failures (in service) Mean distance between failures (in service)

30,000 14,000

25,000 12,000

10,000 20,000 es es

r r 8,000 15,000 6,000 Kilomet Kilomet 10,000 4,000

5,000 2,000

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual)

East London line – rolling stock Piccadilly line – rolling stock Mean distance between failures (in service) Mean distance between failures (in service)

20,000 25,000

18,000

16,000 20,000

14,000

12,000 15,000 es es r r 10,000

Kilomet 8,000 Kilomet 10,000

6,000

4,000 5,000

2,000

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual)

Jubilee line – rolling stock Northern line – rolling stock Mean distance between failures (in service) Mean distance between failures (in service)

14,000 10,000

9,000 12,000 8,000

10,000 7,000

6,000 es es

r 8,000 r 5,000 6,000

Kilomet Kilomet 4,000

4,000 3,000 2,000 2,000 1,000

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual) London Underground and the PPP: the third year 2005/06 31.

4.2 Signalling and control systems Delays due to signalling continue to be the second biggest cause of asset related lost customer hours. Signalling systems are complex and involve not only the lineside signal assets, but also a range of other track-based, train borne and control centre assets. Legacy issues associated with aging technologies are a feature of this asset group. For simplicity, we have grouped all these assets together in this analysis.10 The overall trend has only slightly improved since the start of PPP. Despite some reductions in the numbers of failures, the average duration is still of great concern with train control service disruptions averaging more than 30 minutes, unchanged from the previous year. Tube Lines have achieved a 15% improvement in the number of failures, Metronet BCV improved slightly and recorded the fewest failures (around 66 per four-week period) and Metronet SSL recorded an increase in the number of failures, but an improvement in the average duration. The continuation of varied performance is in part symptomatic of on-going scarcity of first line maintenance staff – particularly Technical Officers – leading to poor response times. Both Metronet and Tube Lines have invested in this area the improvements are not consistent – this is and need to ensure that recruitment and training illustrated where two Infracos share responsibility lead times are managed, and that competition from for a line. For example failures on the Piccadilly and projects for this resource does not undermine Metropolitan line sections controlled by Tube Lines the investment. are fewer than those on the Metronet sections, even adjusting for the different lengths. Signalling maintenance is one of the areas where, in May 2005, LU provided the Infracos with specific The most common causes of signalling failures maintenance improvement recommendations. are electrical track circuits, train stops and points. Metronet and Tube Lines have undertaken to increase All of these are based on or about the track and commitment to achieve greater improvements in suffer from poor track condition and intervention performance. Despite the increase in failure duration, by Infraco project teams undertaking track work. the number of failures has begun to decrease in all The Infracos need to ensure that, with the increase three Infracos, including Tube Lines on the Northern in project work, there remains enough focus on line. Measures taken include identifying operationally protecting the fundamental reliability of the railway. critical assets and improving diagnostic techniques Proper plans, surveys, contingencies for plant and root cause analysis to reduce the number of ‘no failure, and more focus on hand back, would do cause found’ failures, currently approximately one much to reduce not only the number of failures, quarter of all incidents. These positive steps are not but also the occurrence of overruns. yet evident in the performance statistics. Moreover,

10. This category therefore includes signal and points failures, track circuit failures and faults with automatic train operation systems. The metric used for both control and track is the number of in-service failures resulting in delays greater than two minutes per four-week period. 32.

Train control systems performance Train control faults / 1m train KM – average 2005/06 Line level comparisons. (Based on Infraco Cause Codes) 60

50

40 r

mbe 30 u N 20

10

0

Bakerloo Central District Jubilee Metropolitan, Circle, Hammersmith & City Metropolitan JNP Northern Piccadilly Piccadilly SSL Victoria

All Infracos – train control Metronet BCV – train control No. of in service failures resulting in service disruption > 2 minutes No. of in service failures resulting in service disruption > 2 minutes

350 120

300 100

250 80 s s

r 200 r 60 mbe mbe u 150 u N N 40 100

50 20

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual)

Metronet SSL – train control Tube Lines (JNP) – train control No. of in service failures resulting in service disruption > 2 minutes No. of in service failures resulting in service disruption > 2 minutes

120 140

100 120

100 80 s s

r r 80 60 mbe mbe u u 60 N N 40 40

20 20

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual) London Underground and the PPP: the third year 2005/06 33.

4.3 Track Track was also highlighted in last year’s report as an area where LU set out specific recommendations for maintenance improvement to the Infracos. In the last year, the number of failures has fallen by 5% to an average of 45 incidents per four-week period. However, the average duration of service disruptions due to track failures has worsened by 16%, from 18 to 21 minutes on average (excluding speed restrictions). In May 2006 LU issued an emergency direction to Metronet SSL because of concerns over its management of track on the District line.11 This accompanied the issue of an HMRI enforcement notice to Metronet, which marked the latest in a series of non-compliances by Metronet in this area. LU will be working with Metronet SSL and monitoring their delivery of the required improvements. Temporary Speed Restrictions are imposed where track defects are found or suspected. Speed restrictions maintain safety, but impair journey times. The number of speed restrictions continues to increase. While there has been an improvement by the Infracos in their response to the discovery of defects, performance will continue to suffer until the general condition of the track is improved and avoidable faults are prevented. These include failures of insulated rail joints (joints in the track that mark the break between signalling sections), which still occur in significant numbers but could Unlike National Rail, where responsibility for train be prevented through more effective maintenance and track is divided among different parties, on the and track renewal. Widespread disruption was Underground the Infracos are responsible for both caused in May of this year by temporary speed sides of the wheel / rail interface. The Infracos restrictions on the sub-surface railway resulting must maximise the advantage of this arrangement from Metronet’s failure to prepare the rails for hot by providing system leadership to the wheel / rail weather during preceding months in the period interface. The Infracos have a real opportunity covered by this report. to display systems thinking and whole life asset management in this area, and it is vital for reliability Infracos have had a notable success in the reduction that they do. in track fires. The number and frequency of these incidents is significantly below the historical average.

11. While this took place after the end of the third year that is the subject of this report, the emergency direction reflects general dissatisfaction that has been building over a number of months. 34.

12 Track asset performance All Infracos - track No. of in service failures resulting in service disruption > 2 minutes

70

60

50 s

r 40 mbe u 30 N

20

10

0 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual)

Metronet BCV – track Metronet SSL – track No. of in service failures resulting in service disruption > 2 minutes No. of in service failures resulting in service disruption > 2 minutes

18 30

16 25 14

12 20 s s r 10 r 15 mbe mbe

u 8 u N N 6 10

4 5 2

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual)

Tube Lines (JNP) – track Track faults (excluding TSRs) / 1m train KM – average 2005/06 No. of in service failures resulting in service disruption > 2 minutes (Based on Infraco Cause Codes)

35 18

16 30 14

25 12 r

s 10 r 20 mbe u

mbe 8 N u 15 N 6

10 4

2 5 0 0 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Bakerloo Central District Jubilee Metropolitan, Circle, Hammersmith & City Actual 6 per. Mov. Avg. (Actual) Metropolitan JNP Northern Piccadilly Piccadilly SSL Victoria

12. All the track performance graphs exclude speed restrictions. London Underground and the PPP: the third year 2005/06 35.

4.4 Escalators and lifts Escalators and lifts cause the highest number of lost customer hours on stations. Failure of these machines can cause extended walking times for customers and full station closures. Lift reliability typifies a minimum acceptable level. Metronet BCV suffer a lift failure every 10.6 days, which is a 21% improvement on last year. Metronet SSL average slightly better, but their performance has worsened by 30% against 2004/05. Tube Lines performance improved by 5% to 13.0 days between failures. Tube Lines’ average fix time for lifts is just over five hours, while the average fix time for the two Metronet Infracos is just over four hours. Lift reliability has been a problem for both Metronet The most unreliable escalators are single machines and Tube Lines at particular locations. Shadwell, at Kings Cross St Pancras, Waterloo, Oxford Circus Regent’s Park and Kennington stations have the and Tottenham Court Road, all of which failed over most unreliable lifts, with a lift at Shadwell failing 30 times in the last year. These machines are clear 78 times in 2005/06. In total 14 lifts, all at different priorities for the Infracos to address. Specific stations, failed at a rate of more than once a week failures also highlight concerns the Infracos must in the last year. address. For example, escalators at Waterloo failed shortly after a major overhaul, and an escalator at The Infracos continue to experience an unacceptable Kentish Town was restored to service following a level of failures in the lifts that are essential for failure in 2005 only after a protracted period. providing step free access between street and platform. The service these lifts provide is popular The performance of lifts and escalators continues to with many customers, and for some customers, be affected by a number of factors. The fleets are in failure means that an entire journey becomes a generally poor condition, which means that delivery impossible because of the lack of a step free of renewal and replacement projects is essential route. The problem partly relates to legacy design to bring about long term improvement. The unique issues, but maintenance is also a factor, as is the operating environment and physical constraints of availability of sufficient specialist resource. the Underground often mean that lifts and escalators are built to designs bespoke not only to London Escalators have shown a 9% improvement overall, Underground, but in some cases to the individual with the average time between failures now standing station or shaft. Effective management of the supply at 49.3 days. Tube Lines has the largest fleet of chain, attention to detail and proper root cause escalators and, following an 18% improvement last analysis of failures are critical to the continued year, is now performing slightly above the network maintenance effort. All parties are working to average. Metronet BCV performance improved by develop the supply chain to meet current and 5%, and Metronet SSL worsened slightly, though future needs. To this end, Tube Lines have recently remains above the network average at 61.1 days implemented their escalator sourcing strategy between failures. Average times to fix vary between and we look forward to seeing the results of this the Infracos with Metronet SSL taking under half a over a sustained period. day, Tube Lines just under a day and Metronet BCV nearly a day and a half. 36.

Escalator failures Lift failures Average fix time during 2005/06 Average fix time during 2005/06

1.6 1.6

1.4 1.4

1.2 1.2

1.0 s 1.0 ur ays d e e ho

g 0.8 0.8 g a a r r

Ave 0.6 0.6 Ave

0.4 0.4

0.2 0.2

0 0

Infraco Infraco BCV JNP SSL BCV JNP SSL

Escalator and lift asset performance

Total all Infracos – escalators Total all Infracos – lifts Mean time between failures (days) Mean time between failures (days)

70 16

60 14

12 50 10 40 8 Days 30 Days 6 20 4

10 2

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual) London Underground and the PPP: the third year 2005/06 37.

Metronet BCV – escalators Metronet BCV – lifts Mean time between failures (days) Mean time between failures (days)

80 14

70 12

60 10 50 8 40 Days Days 6 30 4 20

10 2

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual)

Metronet SSL – escalators Metronet SSL – lifts Mean time between failures (days) Mean time between failures (days)

100 30

90 25 80

70 20 60

50 15 Days Days 40 10 30

20 5 10

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual)

Tube Lines (JNP) – escalators Tube Lines (JNP) – lifts Mean time between failures (days) Mean time between failures (days)

70 25

60 20 50

15 40

Days 30 Days 10

20 5 10

0 0 12345678 91011121312345678 9 10111213 12345678 91011121312345678 9 10111213 Period 2004/05 – 2005/06 Period 2004/05 – 2005/06 Actual 6 per. Mov. Avg. (Actual) Actual 6 per. Mov. Avg. (Actual) 38.

5. 5.1 Track Renewals and The combined bids envisaged renewal of a third of the 1 total 845 kms of track maintained in the first 7 ⁄2 years upgrades of the contract. Track renewal delivers reliability and journey time benefits, through reduction in failures and higher permitted speeds, and also improves ride quality for customers. Full track renewal involves reconditioning of the track bed, ballast and sleepers as well as replacement of rails.14 Overall, the third year of the contract saw all three Infracos deliver a higher level of track renewal than has previously been achieved. Nonetheless, Metronet are still well behind their Long term asset performance depends not only bid expectations, and this means the overall track on the maintenance regimes that Metronet and programme is behind the cumulative bids which Tube Lines have in place, but also on their ability to should have seen 11% of entire track asset deliver the renewal and upgrade of assets. The PPP completed by now, compared to 9% actually was intended to overcome the historic problem of completed. Metronet’s latest plan for SSL shows inconsistent and insufficient funding impeding that even with a significant increase in renewal renewal and upgrades. rates (hopefully made possible by recent investment in new engineering vehicles), Metronet The PPP intends a high level of renewal and upgrade will fall short of their bid target at the end of 1 activity in the first half of the contract, with significant the first 7 ⁄2 year period. The latest plan also 1 progress required in the first 7 ⁄2 years. The contracts shows that delivery continues to run behind specify completion dates for certain types of works, incurred cost for Metronet SSL, and this remains such as line upgrades and station enhancements. a concern. Metronet BCV’s latest plan shows For other types of asset (such as lifts, escalators better alignment of cost and volume delivery, and track) the contracts set out asset condition but their forecast total renewal for the first 1 requirements for each 7 ⁄2-year period and residual contract period is now significantly lower. life requirements for the end of the contract.13 The Infracos must decide on a renewal strategy that will Tube Lines have now completed a total of 32.9km meet these requirements in the most economic and of track renewal, which puts them ahead of the bid efficient manner, and are liable for financial penalties position for the end of the third year. if they fail to meet the required dates or benchmarks. Both Metronet BCV and Tube Lines have proposed 15 This chapter focuses on how the Infracos have rerailing for some parts of their networks. For performed in terms of delivery of renewals for Metronet BCV this is being offered to compensate four major areas: track, lifts and escalators, stations for the serious shortfall in planned renewals against and line upgrades. The following chapter then bid. Tube Lines still propose to deliver about the goes on to explore the way in which asset renewal same level of renewals. The principle of what they decisions are being made by the Infracos and the propose is not without merit, however what they extent to which they are applying appropriate propose must demonstrate a whole life asset asset management strategies. approach, as opposed to a short term cost saving.

13. These are in addition to the asset performance regime described in chapter 4 and the safety and engineering standards governing the condition of assets. 14. This section therefore includes all ballasted track replacement (BTR), enhanced track replacement (ETR), as well as tube reconditioning (track replacement in tunnel sections). Note that ‘plan’ figures come from the draft 2005/06 AAMP plans and bid phasing is based on the Schedule 1.9, Annex 5 cost phasing. 15. For example some sections of deep tube in tunnel, where the track bed is formed of concrete. London Underground and the PPP: the third year 2005/06 39.

Metronet particularly must ensure that increased rates of plain line renewal are not achieved at the expense of deferred renewals of points and crossings, which could limit effective line speeds and the usefulness of the work overall. The Infracos are planning to renew 38.7km of track during the fourth year of the contract. Assuming this is achieved this would mean that Metronet would have delivered 77% of what was promised in the bid on BCV, and just 61% on SSL. Tube Lines would continue to be running ahead of bid. Given the rate of track related delays and recent failures described above, it is imperative the track renewal programme delivers as promised.

Track renewal Cumulative Plan for Hence total Bid total Expected Kilometres to date year 4 expected to end of as % of at end of year 4 bid year 4

Metronet BCV 29.6 14.7 44.3 57.8 77% Metronet SSL 12.2 13.1 25.3 41.4 61% Tube Lines 32.9 10.9 43.8 33.3 132%

Total kms 74.7 38.7 113.4 132.5 - As % network 9% - 13% 16% -

Track renewal The chart below shows overall progress against plan and bid. The charts on the page following compare each Infraco’s actual against bid and plan; and cost against volume delivery.

Total PPP contractors track renewals

Actuals to date 9% 91%

AAMP 0607 period 1 27% 73%

BID period 1 33% 67%

Total bid 84% 16%

0 102030405060708090100 % of track renewals completed Track renewals completed Yet to complete 40.

Metronet BCV Metronet BCV track replacement volume and cost phasing Track renewal / replacement (including rerailing) % of first review period

140 100

90 120 80

es 100

r 70

60 80

lative (%) lative 50 u

60 m u

lative kilomet lative 40 u Acc m u 40 30 C 20 20 10

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 7 1/5 Year Contract years Delivered AAMP 2005/06 Bid AAMP 2006/07 AAMP 2006/07 “Rerail” AAMP volume phasing AAMP cost phasing

Metronet SSL Metronet SSL track replacement volume and cost phasing Track renewal / replacement % of first review period

120 100

90 100 80 es

r 70 80 60

60 (%) lative 50 u m u

lative kilomet lative 40 u Acc m 40

u 30 C 20 20 10

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 7 1/5 Year Contract years Delivered AAMP 2005/06 Bid KM based Annex 5 Phasing AAMP 2006/07 AAMP volume phasing AAMP cost phasing

Tube Lines (JNP) Tube Lines (JNP) track replacement volume and cost phasing Track renewal / replacement (including rerailing) % of first review period

180 100

160 90

140 80 es

r 70 120 60 100

lative (%) lative 50 u

80 m u

lative kilomet lative 40 u Acc m 60

u 30 C 40 20

20 10

0 0 02/0303/04 04/05 05/06 06/07 07/08 08/09 09/10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 7 1/5 Year Contract years Delivered AAMP 2005/06 Bid AAMP 2006/07 AAMP 2006/07 “Rerail” AAMP volume phasing AAMP cost phasing London Underground and the PPP: the third year 2005/06 41.

5.2 Lifts and escalators Escalators The bids assumed that the entire fleet of lifts and A total of 64 escalators have now been refurbished escalators would undergo renewal during the life of or replaced; this is just under a third of the 210 1 the contract. The bids promised 59% of the fleet to machines due in the first 7 ⁄2 years according to the 1 be completed in the first 7 ⁄2 year period, though this bids. The bids for Metronet BCV and Tube Lines has been revised down slightly in the latest plans. both predicted a high level of renewals in the early To date, 79 machines (15%) have been refurbished years and then fewer in the later years. In practice or replaced.16 the achieved rate has fallen short of these high expectations, in part because the Infracos sought to Lifts renegotiate their supply contracts. The latest plans show rephasing of projects over the period. The PPP lift programme primarily focuses on ensuring that the legacy fleet of a hundred lifts are reliable Metronet BCV delivered a further 8 projects in and maintained in a state of good repair. At the end 2005/06 taking their total to date to 24 machines, of the third year, four lifts have been refurbished or some 18% of their total fleet. A similar level of replaced, an increase of two on last year. achievement is required each year if they are to meet their plan target, which is marginally lower According to the bid, Metronet BCV should than the bid total. Metronet SSL’s bid phasing have completed 10 projects by now as part of a suggested a more even increase in the delivery programme to tackle 17 by the end of the first rate. Accordingly, having completed 11 machines period. Just two have been completed, and these to date, they are ahead of the cumulative bid were during the first year of the contract. Last position, and their plan anticipates exceeding the year’s plan suggested that major activity would 1 bid target over the whole 7 ⁄2 years. start from 2006/07. Tube Lines has implemented an Escalator Sourcing Metronet SSL has a small fleet of lifts. So far none Strategy, and has achieved some notable success of these have been refurbished or replaced (against in reducing the downtime for escalator renewals an expectation of two in the bid) and the latest plan to around nine weeks compared to the six to nine projects that four lifts will be completed in the first 1 months traditionally taken. Overall they delivered 7 ⁄2 years. This differs markedly from last year’s plan the 12 renewals they planned for the third year. which anticipated completion of eight lifts over the same period. A particular area of concern across all the Infracos is the replacement of the LHDM model of escalator. Tube Lines have completed their first two lifts in the These are among the least reliable and require last year, which puts them substantially behind the extraordinary maintenance attention to keep them bid which promised almost 30 by the end of year in service. Though not an explicit contractual three. They have however completed reliability works obligation, Metronet and Tube Lines were aware, on 19 lifts. The current plan shows a further five lifts at the start of the contracts, of LU’s desire to see undergoing reliability works in the coming year, and a the entire fleet of 61 machines replaced by 2010. gradual increase in the refurbishment/replacement So far only one machine has been replaced, and rate to achieve 25 by the end of the first period, still the Infracos’ current plans suggest only three more slightly below bid. Tube Lines is developing its Lifts will be replaced by 2010. Sourcing Strategy for implementation in 2007. Tube Lines believe this will deliver improved performance across the fleet.

16. This includes escalators, step free and passenger service lifts. 42.

Step Free Access Lifts Metronet BCV The charts below summarise step free access lift Step free access lift refurbishment and replacement renewal performance against plan and bid, and 20 planned costs against planned work. These are 18 16

separated out from other lifts because of the f

o 14 r

different role they play, and the number of new eplacements 12 mbe r

u d installations in this area. 10

lative n lative 8 u m

u 6 C bishments an

fur 4 e r 2

0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07

Metronet SSL Tube Lines (JNP) Step free access lift refurbishment and replacement Step free access lift refurbishment and replacement

25 40

35 20 30 f f o o r r 25

eplacements 15 eplacements mbe mbe r r

u u d d 20

lative n lative 10 n lative

u u 15 m m u u C C bishments an bishments an 10

fur 5 fur e e r r 5

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 Delivered AAMP 2005/06 CFO Bid AAMP 2006/07

Lifts Total lift and escalator refurbishments and replacements The chart on the right shows overall lift and escalator renewal performance to date, plan and 1 Actuals to date 14% 86% bid for the first 7 ⁄2 years and the bid for 30 years.

The charts opposite summarise lift renewal AAMP 0607 period 1 48% 52% performance against plan and bid, and planned costs against planned work. AAMP period 1 52% 48%

BID period 1 59% 41%

Total bid 100%

0 102030405060708090100 % of lifts and escalators refurbished or replaced Tot al lift and escalator renewals completed Yet to complete London Underground and the PPP: the third year 2005/06 43.

Metronet BCV Metronet BCV lift refurbishment and replacement Lift refurbishment and replacement Volume and cost phasing 2006/07

26 100

24 90 22 80 20 f

o 18 70 r

16 bishments eplacements 60 mbe r fur

u e d

14 r

f 50 12 lative n lative 10 eplacements & £ 40 u r

d m

u 8 lative % o lative 30 an C u bishments an

6 m u fur 20 e C

r 4 2 10 0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 (1/2) Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 AAMP cumulative volume phasing AAMP cumulative cost phasing

Metronet SSL Metronet SSL lift refurbishment and replacement Lift refurbishment and replacement Volume and cost phasing 2006/07

9 100

8 90

7 80 f

o 70 r 6 bishments

eplacements 60 mbe r fur

u

5 e d r

f 50 4 lative n lative

eplacements & £ 40 u r

d m 3 u

lative % o lative 30 an C u bishments an

2 m u fur 20 e C r 1 10

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 AAMP 2006/07 cumulative volume AAMP 2006/07 cumulative costs

Tube Lines (JNP) Tube Lines (JNP) lift refurbishment and replacement Lift refurbishment and replacement Volume and cost phasing 2006/07

35 100

90 30 80

f 25 o 70 r bishments

eplacements 60 mbe r fur 20 u e d r

f 50 15 lative n lative

eplacements & £ 40 u r

d m u

lative % o lative 30

10 an C u bishments an m u fur 20 e C r 5 10

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 AAMP 2006/07 cumulative volume AAMP 2006/07 cumulative costs 44.

Metronet BCV Metronet BCV escalator refurbishment and replacement Escalator refurbishment and replacement Volume and cost phasing 2006/07

70 100 65 90 60 55 80

f 50 o 70 r

45 bishments

eplacements 60 mbe r fur 40 u e d r

35 f 50 30 lative n lative

eplacements & £ 40 u r 25 d m u

lative % o lative 30

20 an C u bishments an

15 m u fur 20 e C r 10 10 5 0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 (1/2) Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 AAMP 2006/07 cumulative volumes AAMP 2006/07 cumulative costs

Metronet SSL Metronet SSL escalator refurbishment and replacement Escalator refurbishment and replacement Volume and cost phasing 2006/07

30 100

90 25 80 f

o 70 r 20 bishments

eplacements 60 mbe r fur

u e d r

15 f 50 lative n lative

eplacements & £ 40 u r

d m 10 u

lative % o lative 30 an C u bishments an m u fur 20 e 5 C r 10

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 AAMP 2006/07 cumulative volume AAMP 2006/07 cumulative costs

Tube Lines (JNP) Tube Lines (JNP) escalator refurbishment and replacement Escalator refurbishment and replacement Volume and cost phasing 2006/07

120 100

90 100 80 f

o 70 r 80 bishments

eplacements 60 mbe r fur

u e d r

60 f 50 lative n lative

eplacements & £ 40 u r

d m 40 u

lative % o lative 30 an C u bishments an m u fur 20 e 20 C r 10

0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year Year Delivered AAMP 2005/06 CFO Bid AAMP 2006/07 AAMP 2006/07 cumulative volume AAMP 2006/07 cumulative costs

Escalator renewal Actual against plan and bid, and cost against volume. London Underground and the PPP: the third year 2005/06 45.

Cumulative Plan for Hence total Bid total Expected Metronet BCV finally completed the three stations to date year 4 expected to end of as % of due in 2004/05 in the last year, on average 33 weeks at end of year 4 bid at end year 4 of year 4 late, while none of the 14 stations due in 2005/06 have been completed and are running on average 24 Lifts (all types) Metronet BCV 2 12 14 20 70% weeks behind schedule. Metronet SSL are similarly Metronet SSL 6061833%running behind, with eight stations completed six Tube Lines 2462921%months late, and further stations in progress but Total 10 16 26 67 - also late. Moreover, a regulatory notice was issued Escalators in December 2005 in response to concerns about Metronet BCV 24 8 32 27 119% Metronet SSL 11 1 12 11 109% Metronet’s management of these projects. Last Tube Lines 29 16 45 76 59% year’s PPP report challenged Metronet to improve Total 64 25 89 114 - their performance in this area; they have failed to do this, and consequently LU issued a Corrective Action Notice to Metronet in June 2006. The CAN set out a schedule for completing the station 5.3 Station programme projects based on Metronet’s forecast completion dates at the time of issue. We have recommended Under the PPP contracts all stations are to undergo Metronet address the root causes of their failure an enhancement project by 2012,17 with the vast 1 to deliver, considering, for example, the level of majority being due for completion in the first 7 ⁄2 year on-site supervision, timeliness of design reviews, contract period. The intention behind the station and adequacy of the supply chain arrangements.20 enhancement programme is to bring all stations up to standard in terms of asset condition, decor and Tube Lines had declared completion of a total of customer facilities such as CCTV, help points, audio 20 stations at the end of the third year. This is in line and visual information and accessibility features (e.g. with the contractual requirement, and while some induction loops, tactile strips and colour contrasts). are under review, the majority have been accepted For some stations a refurbishment is sufficient (with snagging lists agreed where appropriate). to achieve modern standards, while for others more work is required in the form of an enhanced refurbishment or a full modernisation. The Infracos risk abatement for late delivery of these projects.18 The contractual requirements for the station enhancement programme recognise the need for work to ramp up: 18 stations were due by the end of the second year, 44 by the end of the third, with a similar number due in future years. While Tube Lines are achieving the required delivery rate, Metronet have fallen behind.19

17. All stations (except those on the East London line, due to the extension project for that line) are due for a modernisation or some form of refurbishment by 2012, and standards for customer facilities (CCTV etc) must be achieved by the end of the first 1 7 ⁄2 year period. 18. For simplicity this section uses the term ‘enhancement’ to cover all refurbishments, enhanced refurbishments and modernisations. Such projects do not include works to increase capacity or (except in a minority of cases) provide step-free access. 19. Note that LU undertake a full review of stations declared ‘complete’ by Infraco, hence the total listed as complete in this section may include some stations where LU is still reviewing whether or not to accept delivery into service. 20. It should be noted that at the time of writing Metronet have not accepted the imposition of the CAN and are considering whether they have any grounds for a challenge. 46.

Station refurbishment and modernisations Metronet BCV Total for all Infracos Station refurbishment and modernisations

45 20

40 18

35 16 14 30 12 bishments 25 bishments nisations nisations r r fur fur e e

e e 10 r r d d

f 20 f

o o 8 r r mo mo

d 15 d 6 an an mbe mbe u 10 u N N 4 5 2 0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year Year Delivered in correct contract year Under review Delivered in correct contract year Under review Delivered late in following contract year Contract Delivered late in following contract year Contract

Metronet SSL Tube Lines (JNP) Station refurbishment and modernisations Station refurbishment and modernisations

20 20 18 18 16 16 14 14 12 12 bishments bishments nisations nisations r r fur fur e e

e 10 e 10 r r d d

f f

o 8 o 8 r r mo mo d d 6 6 an an mbe mbe u u

N 4 N 4 2 2 0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year Year Delivered in correct contract year Under review Delivered in correct contract year Under review Delivered late in following contract year Contract Delivered late in following contract year Contract

Station Enhancements 1 Modernisations, refurbishments and enhanced refurbishments in the first 7 ⁄2 years. Actual performance against contract. London Underground and the PPP: the third year 2005/06 47.

5.4 Line upgrades and related projects March 2006 deadline. The Central line upgrade was Under PPP all lines are due an upgrade project by always going to be relatively straight forward – 2020, resulting in increased capacity and reduced essentially it completes an earlier upgrade by journey times. The capability targets set out in the addressing speed restrictions, increasing the fleet PPP contracts specify certain improvements in size available for scheduled service, and providing journey times by particular dates and the PPP facilities for the increased number of staff to contains financial incentives for the Infracos to operate more intense services. achieve these targets. Typically the achievement of The interim Victoria line upgrade was also due the journey time capability targets will involve some in March 2006, and Metronet have focused on combination of more trains, faster trains or trains removing speed restrictions and making more with more capacity, the detail being a matter for the trains available. These efforts achieved a 5% Infraco to determine. This means that the Infracos capability improvement, which falls slightly short should schedule their renewals of key assets such of the target in the contract. The full upgrade, as signalling and rolling stock in an integrated way which includes a new fleet and resignalling, is to deliver a line upgrade. To assist, the contract currently targeting completion in 2011 – over a specifies latest dates for rolling stock refurbishment year earlier than the contractual latest date. that accord with the line upgrade dates. At the end of the third year, Metronet reported The table below shows a high level programme for they are 18% complete, slightly behind their the line upgrades including the journey time planned position (21%). Notable progress in the reduction and estimated increase in capacity.21 last year has included starting production of the The capability improvements discussed in chapter 3 first pre-production train, installing 37 km (14%) above partly reflect outputs of the line upgrade of the required cabling, and letting a contract for programme. This section discusses these complex construction of the new control centre. projects in more detail. The Jubilee and Northern line upgrades are The first line upgrade milestones are the small contractually due by 2009 and 2012 respectively, upgrade on the Central line, and interim upgrade of and are being approached by Tube Lines as a the Victoria line. Metronet achieved the targeted 6% combined project. The notable achievement capability improvement for the Central line by the of the last year has been the switch to 7-car

Line 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Contract Journey time Capacity delivery date improvement increase

Central March 2006 6% 29%

Victoria March 2006 5%

Waterloo & City March 2007 12% 30%

Jubilee December 2009 22% 48%

Northern January 2012 18% 21%

Northern SSL March 2012 2%

Southern SSL March 2012 1%

Victoria August 2013 16% 35%

Piccadilly October 2014 19% 35%

Northern SSL February 2015 17% 19%

Southern SSL February 2015 2%

Southern SSL March 2018 13% 19%

Bakerloo March 2020 18% 23%

21. Line upgrades and the PPP incentives are discussed further in the ‘Capability’ section of Chapter 3 above. Note that the PPP contracts do not specify a line upgrade for the East London line, which is subject to a separate extension project. Capacity figures are estimates based on expected train service volumes and are subject to change as the Infracos’ plans develop. 48.

operation on the Jubilee line, which was completed trains to provide incremental capacity on top of the on 29 December and instantly provided a 17% 19% provided by the base upgrade. In advance of the capacity increase. The full upgrade requires line upgrade, Metronet SSL is required to refurbish resignalling, for which Tube Lines have now the District line (D-stock) fleet by 2009. Seventeen completed 60 km of cabling. Resignalling is also trains promised in the third year were delivered, and a key feature of the Northern line upgrade. Both customer reaction has been positive. upgrades are currently on programme to deliver At the end of the third year, all the upgrades due in 9 months ahead of the contractual latest date. the short and medium term are showing tangible At the time of writing, the Waterloo & City line progress. While this is welcome, it must also be is undergoing an extended closure as part of its recognised the projects are at very early stages. line upgrade. During the closure Metronet are There are important issues that still need to be completely replacing the track, removing the trains satisfactorily addressed. These include understanding for refurbishment, improving the signalling system the power requirements of the upgrades and ensuring and undertaking other works. Improvements to the these are compatible with responsible environmental control systems following the closure will complete management, solving the interoperability and system the upgrade ahead of the latest date of March 2007. integration questions, demonstrating that the This upgrade is a major test for Metronet in the technical solution is operable, and most importantly, same way as the 7-car project was a major and ensuring that the upgrade works themselves do not successful test for Tube Lines. compromise our ability to run a reliable service in the interim. Over the next year the Northern and Victoria The Sub-Surface upgrade is the most complex of all lines will start undergoing weekend closures for the upgrade projects, as it covers multiple lines on upgrade works for the first time, and it is vital for our the sub-surface, and interfaces with Tube Lines and customers that an operable railway is handed back, Network Rail operations. The whole programme on time, ready to meet weekday demand. The stretches out to 2018 according to the contractual growing level of upgrade work makes it vital that the latest dates, with interim milestones in 2012 and Infracos firstly have credible plans to manage the 2015. Metronet are reporting actual progress to date transition states, and secondly improve the basic of around 9% which is broadly in line with their plan. asset reliability of the ‘old’ assets so that the line Progress in the last year has included detailed design can withstand the pressure of the upgrades. The work on the new sub-surface fleet, and agreement end result however should see around a 25% with LU of a variation which will see 7-car train sets increase in capacity – a deliverable vital to London’s in place of all services currently operated by 6-car future growth. London Underground and the PPP: the third year 2005/06 49.

6.0 6.2 Asset management strategies and plans Asset The contract requires the Infracos to produce certain documents setting out their approach to management whole life asset management and planning for LU’s approval. Each Infraco’s Asset Management Strategy should set out the high-level regime by which efficient and economic whole-life asset management will be achieved. Additionally, the Annual Asset Management Plan must report on progress in the last year, confirm the continued validity of the management regimes, and detail maintenance and renewal plans for the next nine years. The Annual Asset Management Plan should also contain supporting cost information to show The ability of private sector infrastructure companies evidence that whole life asset management is to deliver whole life asset management to their being implemented and its consequences for planning of maintenance and renewal activity was Infracos’ expenditure projections. one of fundamental principles of the PPP concept. This chapter examines the main components of The Tube Lines Asset Management Strategy has asset management in the PPP and the Infracos’ received partial approval, and their Annual Asset performance in relation to them. Management Plan is likely to be approvable once outstanding queries, mainly relating to cost tables, have been satisfactorily resolved. 6.1 Asset registers and condition reporting As discussed in last year’s report, a comprehensive Metronet’s Asset Management Strategy was re- asset register is an essential starting point for asset submitted following the changes in their senior management. This is because it demonstrates that management team and is finally nearing approval the Infracos have sufficient knowledge about the subject to the resolution of a number of issues. assets in their stewardship, and are planning their Approval of the Metronet Annual Asset Management maintenance and renewals. Plans was again withheld. While the plans showed much improved clarity and structure we continue All three Infracos are contractually obliged to provide to have concerns about their credibility, particularly LU with a complete asset register showing the given Metronet’s record of delivery to date both physical assets present, together with information of day to day asset performance improvement and such as their value, condition and ownership status. also of the key renewal and upgrade milestones. Tube Lines broadly met this contractual requirement For Metronet particularly, significantly more work in 2004 and have since made further improvements is required on the quality, transparency and time to consolidate and build upon the depth and quality horizons of cost projections, which must tie more of information held within the register. clearly to their plans. Metronet are planning to complete the asset register by their latest contractual date of 31 March 2007 and their progress towards this is being monitored closely. We are concerned about the robustness of Metronet’s processes to maintain current and comprehensive data in the asset register. 50.

6.3 Review Meetings The Annual Asset Management Plans are monitored on a monthly basis through the Infracos’ Asset Performance Review Meetings, which are themed by asset category and involve the relevant parties from LU and the Infracos. Whilst the organisation of these meetings is an Infraco obligation, over the last year LU has instigated an improvement programme to make these meetings more effective. This has included improvements in the preparation, management and recording of the meetings to support a greater focus on trends in asset performance and condition. London Underground and the PPP: the third year 2005/06 51.

7. 0 7.1 Infraco financial information Financial During the past year Metronet and Tube Lines published their accounts for the second year of the outcomes contract. These results are summarised in the following table.

Statutory accounts – Metronet Metronet Tube year ended 31 March 2005 BCV SSL Lines £m

Reported profits Turnover 324 351 864 EBITDA22 54 60 137 EBITDA/Turnover 17% 17% 16% Profit after tax – year 14 20 50 Profit after tax – since contract start 30 39 89

Net debt Investment in London’s underground network Net debt B/F (97) (35) (645) through the PPP is worth approximately £30bn over Change in year (140) (160) (305) the 30-year life of the PPP contracts. Long-term Net debt C/F (237) (195) (950) private finance introduces £5bn, and the public sector funds the remaining £25bn over the 30 years. As in prior years, the Infracos adoption of different London Underground pays for this investment accounting policies means that their financial results 23 through the Infrastructure Service Charge (ISC). are not readily comparable. However, we note that The ISC consists of an agreed base payment both companies maintain healthy reported profit. adjusted by performance-related bonuses and The statutory accounts for the financial year to 31 abatement payments. LU has paid the Infracos March 2006 will be received in the summer of 2006. £3.3bn performance adjusted ISC since the start It is expected that all three Infracos will continue to of the contracts. The Infracos have recorded show profits in line with anticipated levels. investment of approximately £4.1bn in London Underground’s network since the start of the 7.2 Infrastructure Service Charge contracts. In addition, the Infracos have expended The baseline ISC represents the contractually agreed £0.9bn to establish and administer their businesses. fee payable to the Infracos. It is underwritten by the All three Infracos have reported significant transport grant from the Department for Transport. accounting profits to date. The difference between The ISC increases according to an agreed profile and 1 ISC payments and Infraco investment has been met is indexed against inflation. In the second 7 ⁄2-year from the Infracos private finance arrangements. contract period, the agreed profile sees the level of With such significant sums and complex financial ISC increasing by at least 55%, reflecting the profile of arrangements involved, financial information and maintenance, renewal and upgrade expenditure and 24 monitoring is an essential aspect of PPP. This chapter debt service requirements committed at the outset. summarises the main financial issues at the end of The performance adjustments reflect the the third year of the contracts. achievements against the benchmarks for contract performance measures as described in chapter 3 above. In 2005/06, Metronet BCV earned a net bonus while Metronet SSL and Tube Lines incurred net abatements. Since the start of the contracts,

22. EBITDA (earnings before interest, taxes, depreciation, and amortisation). 23. Metronet has adopted application note F to FRS5, whereas Tube Lines follows SSAP 9 resulting in diverging treatment of PPP investment. These choices, while legitimate and known at bid, preclude the use of the published financial information for any meaningful comparison. 24, The PPP second contract period begins on 1 July 2010 (Tube Lines) and 1 October 2010 (Metronet) 52.

Metronet BCV and Tube Lines have earned net Despite these abatements, the Infracos continue to abatements of £9.3m and £30.8m, respectively, report high levels of profit.28 while Metronet SSL has earned a bonus of £5.8m. 29 For all three Infracos, performance payments to date 7.3 Infraco expenditure on the Underground are worse than their bid projections. Metronet BCV The Infracos have recorded spending approximately anticipated bonuses of £17.3m, compared with £4.1bn on London Underground’s network to 31 March an actual abatement of £9.3m. Metronet SSL has 2006.This represents both investment in asset renewal achieved £5.8m of an expected £26.3m from bonuses. (£2.5bn) and asset maintenance (£1.6bn). Moreover, the While both Metronet Infracos anticipated bonuses, Infracos have undertaken additional works for LU, and Tube Lines anticipated an abatement of £21.6m, but these have been paid for outside the ISC. Metronet abatements incurred have been £9.2m higher.25 The BCV have been paid £59m through additional works expected position across all three Infracos by this that have primarily resulted from maintenance and point in the contract was a net bonus of £22.0m, yet other activities post the Chancery Lane derailment the reality has been a £34.3m net abatement. This that occurred just prior to the start of the BCV PPP means the Infracos, especially Metronet, are under- contract. Metronet SSL has been paid £30m from performing compared to their own expectations, and various specific projects including additional scope therefore customers are not benefiting as quickly as on the District line train refurbishment. Tube Lines they should according to the bids. have been paid £153m mainly through additional station projects, including £54m associated with Total bonus / abatement Metronet Metronet Tube Total the redevelopment of Wembley Park station. (Year to 31 March) BCV SSL Lines £m The following table sets out the main areas of 2003 n/a n/a (2.5) (2.5) Infraco investment since the start of the contract. 2004 (7.4) 1.8 (16.7) (22.3) 2005 (3.7) 5.8 (9.1) (7.0) Cumulative capital investment Metronet Metronet Tube Total 2006 1.8 (1.8) (2.5) (2.5) to 31 March 200630 BCV SSL Lines Total (9.3) 5.8 (30.8) (34.3) £m Infraco expectation at transfer 17.3 26.3 (21.6) 22.0 Above / (below) Infraco (26.6) (20.5) (9.2) (56.3) Track and infrastructure 222.3 164.4 169.1 555.8 expectation Trains, depots and signalling 313.5 318.0 404.4 1,035.9 Stations, lifts and escalators 231.7 209.3 448.1 889.1 Total cumulative investment 767.5 691.7 1,021.6 2,480.8 Cumulative to 31 March 2006 Metronet Metronet Tube Total Infraco expectation at transfer 796.1 712.9 927.4 2,436.4 BCV SSL Lines Above / (below) Infraco (28.6) (21.2) 94.2 44.4 £m expectation

Baseline ISC 998.8 1,042.6 1,224.7 3,266.1 Capability 3.6 2.9 4.4 10.9 These figures do not enable conclusive comment Availability (8.2) 16.8 (20.0) (11.4) Ambience 1.9 (0.6) (1.1) 0.2 on the relationship between investment made and Service points (3.6) (7.6) (11.8) (23.0) renewals delivered, particularly because, in the case Specific project adjustments (3.1) (5.7) (2.3)26 (11.1) Total bonus / (abatement) (9.3) 5.8 (30.8) (34.3) of Metronet, the picture is blurred by the inclusion of Usage (2.6) (0.0) (0.4) (3.0) significant payments to some of the Infracos’ supply 27 Performance adjusted ISC 986.9 1,048.4 1,193.5 3,228.8 chain, which may not represent actual work done.

25. Around £6m of this relates to the Camden Town derailment. 26. Includes £1.6m not currently agreed. 27. Other amounts are paid in addition to this relating to ‘transition’ projects which were on site at the time of contract signature where the Infraco is generally reimbursed according to the value of work done. In addition, LU has commissioned further works, of which approximately £242m have been paid to 31 March 2006. Totals may not sum due to rounding. 28. It should be noted that these tables exclude approximately £18m worth of abatement for the closure of the Northern Line in October 2005 due to the Tripcock incident because this is still in abeyance with the full amount subject to dispute resolution. 29. Information on the total expenditure by each Infraco is based on the historic cost data provided by the Infracos with their Annual Asset Management Plans for 2006/07. 30. Capital Investment figures include project spend which has not been capitalised under FRS 15. The figures, provided by the Infracos in April 2006, are cumulative since contract signature and were also used as the basis for preparing the LU Financial Accounts for 2005/06. These figures relate to core PPP investment only and do not include investment associated with additional projects such as Wembley Park. London Underground and the PPP: the third year 2005/06 53.

In addition, each Infraco has expended on asset basis for the increased cost projections and any maintenance, as set out in the following table. implications that this may have on the delivery of The two Metronet companies have expended more the programme of works. Tube Lines projected than anticipated on maintenance activities on trains costs for the first contract period are greater than systems. For Metronet BCV this includes the bid expectations, though these increases are less enhanced maintenance activities following the significant than those of Metronet. Chancery Lane derailment discussed above. During the past year, the two Metronet Infracos

Cumulative maintenance Metronet Metronet Tube Total have undertaken management restructuring. While expenditure BCV SSL Lines they remain legally separate entities, many of the to 31 March 2006 functions and activities of the two Infracos have £m been merged. The new structure creates a new Track and infrastructure 89.8 208.0 115.9 413.7 focus of asset management, commercial and risk Trains, depots and signalling 238.4 223.4 352.7 814.5 Stations, lifts and escalators 130.9 149.6 99.1 379.6 management expertise across the two companies. Total asset maintenance 459.1 581.0 567.7 1,607.8 Metronet expect to make significant improvements Administration and overheads 256.3 243.3 472.4 972.0 Total 715.4 824.3 1,040.1 2,579.8 to delivery and reductions in overheads; however LU has yet to see these improvements materialise.

As custodian of the public funds LU believe that 7.4 Infraco funding and supplier relationships robust processes are critical to ensure that the With most investment due to be delivered over maximum return is achieved from the £25bn of the first half of the contract life, the Infracos have public funds committed to the PPP over the 30-year put in place funding arrangements to supplement contract period. Accordingly we receive financial the ISC during this time. However at the end of the information from the Infracos, and monitor their third year it is estimated that the majority of funds capital programmes. We have also developed required by both Metronet and Tube Lines have common investment reporting systems across the come from the Infrastructure Service Charge, i.e. four companies. The last year has seen significant from the public sector, with 35% – 45% of funds improvements in the quality and completeness of provided through debt arrangements, and only a data received; however, it still falls short of the small proportion from shareholder equity. This required standard. This is an issue that all parties estimate reflects the actual position for the first are working to address. It remains a concern for two years set out below based on the Infracos the forthcoming Metronet Annual Report process own statutory accounts.31 (described below). In addition to information from the joint reporting Sources of funding Metronet Metronet Tube cumulative to 31 March 2005 BCV SSL Lines systems, LU receives cost projections in the Annual £m** Asset Management Plans described in the previous ISC 626 60% 710 59% 911 47% chapter. The most recent set of plans submitted Debt draw down (net of investment 369 35% 443 37% 879 46% in March 2006 show that both Metronet Infracos of surplus Bond proceeds) Equity paid and loans 56 5% 51 4% 135 7% expect to face significantly increased costs in the Total 1,051 1,204 1,925 first contract period. Metronet have provided some provisional information to describe the basis of these increased cost projections, which we are currently reviewing in order to fully understand the

31. Accounts for the year to 31 March 2006 are not yet available. 54.

Metronet Shareholders Consortia Members Metronet’s shareholders are Atkins Metro Ltd, Balfour In addition to receiving dividends and interest as Beatty Infrastructure Investments Ltd, Bombardier shareholders, consortia members have lucrative Transportation (Holdings) UK Ltd, Thames Water plc supply relationships with the Infracos. (a subsidiary of RWE AG) and EDF Energy (Metro In the Metronet case, the shareholders themselves Holdings) Ltd. Each shareholder has a 20% stake in 1 are contracted by Metronet to provide the majority the company. During the first 7 ⁄2-year contract period, of planned investment and maintenance. Payments Metronet shareholders are committed to provide under these arrangements do not necessarily a total of £150m in equity and a further £200m in relate to actual work done since they are based loans. Contributions are made progressively over the on contractual payment dates and not delivery. contract period. Metronet shareholders are believed This is a peculiar arrangement that means the to have received £116m resulting from contract sub-contractors/shareholders are not necessarily award. No dividends have been paid as yet. suffering late delivery on Metronet’s capital Rating agency Standard & Poors downgraded programme. For the 30 months to September Metronet’s credit rating in December 2005, citing as 2005, LU estimates that subcontractor payments reasons Metronet’s lack of progress to mitigate work to Metronet’s shareholders totalled £875m.33 delays, especially regarding stations and track, and The Tube Lines structure differs, with the majority the limited flexibility in the procurement structure of investment sub-contracted on the basis of open to accommodate changes.32 The weakening credit competitive tender. However the shareholders quality of Bombardier Inc has also been a concern. stand to profit through secondment arrangements Metronet’s reduced credit rating has not impaired bringing in specific expertise to Tube Lines. To 31 their ability to continue PPP obligations, however the March 2006, these arrangements are estimated to company’s financial position remains under review. have earned the shareholders £135m.34 Tube Lines Shareholders 7.5 London Underground and the PPP Arbiter35 Tube Lines shareholders are UIC Transport (JNP) The PPP contracts and the Greater London Authority Ltd (a subsidiary of Bechtel Enterprise Holdings Act 1999 established the position of the PPP Arbiter, Inc), and JNP Ventures 2 Ltd (a subsidiary of Amey whose primary responsibility is to support London plc, which is now owned by Ferroival SA). These Underground and the Infracos in reaching a fair companies have a 33.3% and 66.7% stake in Tube 1 agreement at each 7 ⁄2-year Periodic Review of Lines respectively. The shareholders are estimated the PPP contracts. At a Periodic Review, London to have received £39m in ‘success fees’, retained Underground may make certain amendments to on their books as equity. In total the Tube Lines the contracts, and the ISC will be set either by shareholders have provided £45m in equity (£6m agreement between the parties or by determination net of success fee) plus £90m in loans. These of the Arbiter. The first Periodic Reviews are due amounts are underpinned by equity bridging loans. in July 2010 for Tube Lines and October 2010 for Tube Lines shareholders have received dividends Metronet. of approximately £18m. In addition, refinancing of the Tube Lines capital structure shortly after The Arbiter’s responsibilities include providing contract award generated a further special guidance or direction as requested by any of the distribution of £20m to the shareholders and parties. The circumstances in which such direction £42m for London Underground to be reinvested or guidance can be sought vary slightly between in the capital programme. Tube Lines and Metronet. Additionally both

32. The rating from Moody’s has been at this lower level since the original assessment of Metronet’s credit. 33. Estimates exclude the success fees paid at transfer. 34. Figures to 31 March 2006 will only be available when Tube Lines publish their 2006 Annual Report and Accounts. 35. This section discusses various aspects of the role of the Office of the PPP Arbiter. A comprehensive description of the Arbiter’s role can be found on www.ppparbiter.org.uk. London Underground and the PPP: the third year 2005/06 55.

Metronet and Tubes Lines can ask the Arbiter to PPP Contract to satisfy requirements of its lenders. determine various questions as to the amount Metronet declined to make a request for an annual of costs/revenues legitimately incurred or to be report in previous contract years; hence the request incurred by the Infracos. No requests for direction made in May 2006 is the first. It is expected or guidance were made in the period under review, that the Arbiter will make a pronouncement in however at the time of writing, Tube Lines has November 2006. recently made a request for guidance and the first The Arbiter also has a role to play in the event annual review reference for each of the Metronet of an Extraordinary Review. Any Infraco may call Infracos has been started. for an Extraordinary Review if they believe that Tube Lines’ request to the Arbiter for guidance was they have incurred cost overruns or revenue made in May 2006 and relates to the treatment of shortfalls that are economic and efficient and are 1 investment incurred in one 7 ⁄2 year review period greater than a minimum level set by the contract. with returns in subsequent review periods. To date, none of the Infracos have instigated an Extraordinary Review. The Metronet annual report is a further responsibility of the Arbiter, which will be particularly important The contracts place much importance on the in the coming months as the annual report process concepts of economic and efficient behaviour and is undertaken for the first time. In each contract Good Industry Practice, particularly in the area of year, Metronet may ask the Arbiter for guidance pricing. Over the last year LU and the Infracos as to whether or not Metronet BCV and SSL have have engaged in on-going work with the Arbiter to performed their activities to date in an overall establish the basis of Good Industry Practice, and to efficient and economic manner and in accordance determine benchmarking and other studies that will with Good Industry Practice. This mechanism is enable the Arbiter to fulfil his role in the future, and a feature unique to the Metronet contracts and help London Underground ensure that the contracts was requested by Metronet to be included in the deliver value for money. 56.

8.0 This is reflected in the wide range of system safety performance indicators, which are used both to Safety and determine where the safety improvement programme environmental should be focused, and to measure its success. performance The metrics continue to show stable or improving year on year performance, which is a considerable achievement in the context of increasing volumes of engineering work.36 There was one major safety related problem during the year. This occurred on the Northern Line in October 2005 and concerned a series of failures of the tripcock system on the Northern Line train fleet. The tripcock system is part of the train’s emergency safety braking system and stops the train if it passes 8.1 Safety a signal set at danger. The loss of confidence in Providing a safe service for customers and a the integrity of this system, and the need to make safe environment for all those who work on the modifications to the tripcocks of the whole train Underground remains the top priority for TfL, LU and fleet to correct the problem, resulted in the the Infracos. LU, as the operator and infrastructure withdrawal of the Northern Line train service for controller, remains responsible for the safety of the three days. In the run up to this service suspension, railway at all times. LU issued an Emergency Direction to Tube Lines. This contractual mechanism required Tube Lines to LU’s safety management regime is described in undertake a systematic and extensive safety audit of LU’s statutory Safety Case, which is independently the train maintenance arrangements put in place by assessed and accepted by Her Majesty’s Railway their maintenance contractor, Alstom Ltd. LU also Inspectorate (HMRI). Each Infraco is contractually required Tube Lines to produce a rectification plan obliged to produce and comply with its own Safety to correct any deficiencies discovered. Tube Lines Case, which must be approved by LU. The Infracos reacted appropriately and, with Alstom, are delivering are also obliged to co-operate with LU on all health the necessary improvements to programme, which and safety matters. is proving successful in progressively improving the LU monitors the Infracos’ safety performance and reliability of these trains. audits their compliance with their contractual Safety The derailment of a train in service remains LU’s Cases and with LU standards. An annual Safety top asset-related major accident risk. There were Improvement Programme is agreed by all parties. no in-service derailments during 2005/06, reflecting All safety improvement activities are tracked to improved rates of track renewal and maintenance, completion on the LU Safety Action Tracking and the implementation of all the improvements System which records a named accountable called for in the formal investigation reports into manager, deliverables and progress status for every the in-service derailments at Chancery Lane, action. For the third year in succession, there has Hammersmith and Camden Town in 2003, and been an improvement in the proportion of actions White City in 2004.37 While this improvement is completed on time compared with the previous welcome, there can be no room for complacency. year. All three Infracos have again achieved slightly Moreover, further work is required by all three better levels of compliance with their contractual Infracos to reduce minor/slow speed derailments Safety Case requirements than the previous year.

36. Selected performance indicators are described and shown graphically on the page opposite. 37. The Chancery Lane derailment occurred in January 2003, before Metronet took over the BCV contract. The Hammersmith and Camden Town derailments occurred in October 2003 and the White City derailment occurred in May 2004. London Underground and the PPP: the third year 2005/06 57.

of engineering vehicles and empty trains in depots. Safety Key Performance Indicators by Infraco There were 24 such derailments in 2005/06, one Safety performance – Metronet BCV more than occurred in 2004/5. The majority of these derailments are due either to the poor 100 condition of tracks in depots or to errors by Infraco shunting staff, and Infracos must do more to 80 prevent these incidents and the disruption they 60 can cause. 40 All four companies and all our contractors maintained our zero employee and contractor fatalities record 20 again this year, for the fifth year in succession. The overall number of employee major injuries and lost 0 Employee Employee Lost time Technical Confirmed time injuries remains low and significantly better fatalities major injury injuries (LTI) SPADS fires 2004/05 0 3 59 28 79 than other comparable organisations, with further 2005/06 0 1 54 16 73 improvements achieved during 2005/6.

In 2004/5, there was a 30% increase in Signals Safety performance – Metronet SSL Passed At Danger (SPADs) due to signal asset failures (known as technical SPADs) for which the Infracos 120 are responsible. During 2005/6, this adverse trend 100 has been reversed, and the Infracos have reduced 80 the number of technical SPADs by 29% compared with 2004/5. The Infraco investment complements 60 the 14% reduction in train operator caused SPADs, 40 which LU achieved during 2005/6, following an 11% 20 reduction in the previous year. SPADs seriously 0 affect service reliability, however the presence of Employee Employee Lost time Technical Confirmed safety protection systems fitted throughout the fatalities major injury injuries (LTI) SPADS fires 2004/05 0 3 53 108 114 Underground mean that the risk of a collision 2005/06 0 43 84 88 following a SPAD incident is extremely low. The total number of confirmed fires reduced again, Safety performance – Tube Lines (JNP) reaching the lowest level ever recorded for a year, since comprehensive records began to be kept in 100

1989. This is due to a variety of improvements 80 Infracos are progressively implementing across the network. 60

40

20

0

Employee Employee Lost time Technical Confirmed fatalities major injury injuries (LTI) SPADS fires 2004/05 0 1 71 81 94 2005/06 1 53 54 70 58.

8.2 Environmental performance Environmental Improvement Programmes. This The Infracos have a series of contractual obligations includes measuring environmental performance in respect of managing the environment of the through an agreed set of performance indicators, a 38 Underground’s infrastructure and associated land. selection of which are shown below. The dominant During 2005/6, all three Infracos met these obligations, environmental issue remains complaints from including achieving external accreditation of their neighbours about noise from engineering works. environmental management systems to ISO14001, Both Metronet and Tube Lines have made welcome and there were no significant environmental incidents improvements in this area, but with an increasing during the year. work programme, this must be sustained and further improved. LU, Metronet and Tube Lines have delivered against the planned activities in their complementary annual

Environmental performance indicators

Indicator Metronet Metronet Tube Comments BCV SSL Lines

Complaints and incidents Number of noise and vibration complaints 225* 237 * Metronet data only available for Q3 and Q4. Number of incidents of spills and leaks 19 9 16

Energy consumption Depot energy consumption (kWhr) 5563256* 420641 2325859** * Excludes the following depots: Waterloo, Northumberland Park. Includes only 6 months data for Stonebridge Park. ** Excludes Northfields and Lillie Bridge. Includes only 6 months data for Cockfosters and Stratford.

Commercial and industrial waste Commercial and industrial waste – 909 630 1,305 The majority of this waste arises from Tube Lines manage this waste for skip/compactor (tonnes) depots and head office locations. both PPP suppliers. % commercial and industrial waste – 43 28 51 skip/compactor recycled The recycling efforts of Tube Lines Commercial and industrial waste – 6,208 The majority of this waste arises has enabled LU to exceed its target bags/bins (tonnes) from stations. to recycle 25% of all commercial % commercial and industrial waste – 19* * The Tube Lines dedicated recycling and industrial waste. bags/bins recycled service accounted for half the recycling figure achieved.

Hazardous waste Hazardous waste (tonnes) 27,864 A single figure is provided as Metronet manage the vast majority of this waste for both PPP suppliers. The majority of this figure arises from the Metronet ETR work.

Construction and demolition waste Construction and demolition waste 132,797 A single figure is provided as Metronet manage the vast majority of this waste (tonnes) for both PPP suppliers. % construction and demolition waste 68 recycled

38. Due to changes in the measurement system, comprehensive comparisons with the previous year are not possible. London Underground and the PPP: the third year 2005/06 59.

9.0 The Connect consortium, Citylink Telecommunications, and its contractors are responsible for maintaining Managing the LU’s current radio systems and replacing these investment life-expired systems with a single integrated digital programme radio network. During 2005/6 the enabling works were substantially complete on all but some Network Rail sections, while the new build PFI works themselves now stand at 83.5% complete, up from 60% last year. Progress has been made on installation of cable, control room equipment and rolling stock equipment. Most significantly, the new radio system went live on the East London line, as a proving ground for rollout across the network. Despite the progress made in the last year, Connect While the PPP represents a significant part of remains incomplete and over three years late. LU’s overall investment programme, the core Failures of the legacy system are highly disruptive, PPP contracts do not cover some important areas, and the new radio system is essential to improving such as station capacity, step free access, and system reliability. Furthermore, in light of the events operational flexibility. These are taken forward of July last year, new operating protocols require as additional LU led projects in TfL’s five year the withdrawal of trains in passenger service when investment programme. Even the successfully the radio fails. This change makes delivery of the th delivered Jubilee 7 car project was additional new radio system even more critical. It should also investment over that in the core PPP contracts. be noted that due to the relatively frequent failures LU also manages three PFI contracts covering of the legacy system, the operational performance power, communications and ticketing systems. of the railway will suffer until a reliable radio system Overall £7.5bn Investment is due to be delivered is available. Citylink and its Contractor Fluor over the period 2005/06 to 2009/10, £2.3bn of Corporation are planning for the new system to go which is additional to PPP and PFI investment. live across the network over the next year. This is This chapter completes the renewals and upgrades challenging but we will continue to exert pressure picture by discussing PFI progress, delivery of the on Citylink and Fluor to achieve their programme. additional investment, and the interfaces between The PPP programme requires further investment for these mechanisms and the PPP. all three PFIs. For Prestige and Connect this mainly relates to equipment moves to permit PPP works 9.1 PFI Performance (such as station modernisations) and ensuring Prior to conclusion of the PPP in the late 1990s, integration of systems (e.g. radio equipment and Transport for London’s predecessor organisation, new rolling stock). London Transport, entered into three Private In the case of power, the investment need is Finance Initiative (PFI) contracts covering ticketing to ensure that the new assets delivered by the (the Prestige contract), transfer of the Underground’s Infracos, and enhanced services are supported by power supplies from internal generation to national adequate power supplies. This requires LU, the grid supply (the Power contract) and delivery of a Infracos and EdF Energy Powerlink (the Power PFI new digital communications network (the Connect contractor) to work closely to define the scope and contract). While Connect delivery is late, the main technical solution to support the line upgrades. delivery phases for the Prestige and Power contracts Solutions include more plant (new substations) and have been completed. energy efficiency measures such as regenerative braking and installation of low loss conductor rail. 60.

Over the last year, the scope of the power works to Station capacity support the Victoria line upgrade has been agreed, LU has developed a strategy for increasing capacity and work has started on the requirements for the at a number of key stations, in order to reduce sub-surface upgrade. existing overcrowding, and help meet demand- growth targets set out in the Mayor’s London Plan. 9.2 Delivering additional investment Stations have been prioritised according to the In addition to the contracted PPP and PFI investment, criticality of their impact on the smooth running LU has a challenging capital works programme of its of the overall Underground network (with major own, which is aimed at tackling strategic priorities interchanges rated highest), and their synergy with including reliability and train service capacity beyond the PPP line upgrade programme. In the latter case, PPP, station congestion, making the network more this is to ensure that stations do not provide a accessible, and cooling the tube. These programmes bottleneck which prevents customers obtaining the are funded through TfL’s five-year investment maximum benefit from the improved train services. programme, the first full year of which was 2005/06. In the last year we successfully delivered increased We have already taken some important steps to capacity and step free access at Wembley Park delivering on these programmes. station on time and under budget. The new station is now able to meet the increased flows of Reliability and train service capacity customers that will result when the new national The Infracos are primarily responsible for asset stadium finally opens. This project was taken reliability and enabling greater train service capacity forward with Tube Lines as prime contractor, through the PPP. Nevertheless, reliability and capacity indeed an element of the work was core PPP are so important to us, that we are undertaking scope for Tube Lines. further, targeted projects. Works to enlarge Kings Cross St Pancras are The Jubilee 7th car, completed on time and budget at continuing, with Metronet SSL as prime contractor. Christmas, is one example where LU has exercised a May 2006 saw the opening of the new western ticket right to see a specific improvement. In the last year hall. This is the first major deliverable, and it provides we agreed a similar contract with Metronet to ensure greatly enhanced capacity, step free access to the that all new sub-surface trains are seven cars as a sub-surface lines, and improved street access. minimum (currently some run as six car formations). Design works are being progressed for other This requires investment in stations infrastructure priority stations. We will be starting to seek as well as the new fleet. planning powers for some of these schemes (such In support of reliability we are undertaking a as Tottenham Court Road) in the next year, and are programme of operational flexibility enhancements. working with stakeholders to progress the planning These are specific schemes to reduce the frequency stages as quickly as possible. We are also working and/or duration of disruptive incidents, and to allow on a number of secondary schemes, which provide better recovery from the effects of disruptions to local congestion relief and improved interchange. the service. Projects under consideration include In the coming year we are aiming to complete installing new crossovers at 11 sites on various lines works at North Greenwich, progress works at to allow trains to move to key locations quickly Shepherd’s Bush, start the remodelling of Covent during service disruptions. Designs for these and Garden ticket hall and progress designs for other other schemes will be progressed in the next year, stations including Finsbury Park, Highbury & and we are undertaking more operational measures Islington and Vauxhall. such as improving platform barriers and markings to reduce station dwell times. London Underground and the PPP: the third year 2005/06 61.

These projects are expensive and complex, yet vital A new train crew facility has been opened at if we are to maximise the benefit of investment in Hammersmith, relieving the crowded facility at the train service, and avoid heavy congestion at Edgware Road, and another has been completed at these network and locally important locations. Loughton in support of the Central line capability improvement. In the coming year works on train Step free access crew facilities at Acton, Morden and Wembley will be completed. Improving the accessibility of the tube is a key priority for the Mayor, TfL and London Underground. Through the station modernisation and refurbishment 9.3 Delivering the investment programme programme all stations will receive improvements The discussion above illustrates the scale and including tactile guidance systems, tonal contrasts, complexity of the Investment Programme. Some of induction loops in ticket offices and on help points, these projects are being delivered using the Infracos and improved audio and visual information. New as the prime contractor – particularly where there is and refurbished trains will be similarly enhanced. a clear interface with their PPP projects (Jubilee 7th However, the PPP does very little to provide step car for example). However, we are also looking to free access, with only 16 stations being delivered develop the supply market so that we are not totally as part of the core PPP programme. We have set reliant on the Infracos, which will also provide a ourselves a target of increasing the number of step yard-stick to gauge the price and programme of free stations from under a fifth at present, to a similar projects being delivered by Metronet and third by 2013. Moreover we want these stations Tube Lines. to provide a network that genuinely enables step The major first step in that regard was the creation of free journeys. an Alternative Provider Framework Agreement. In an Like the congestion relief projects, step free open competition launched in 2004, three companies schemes are very complex and expensive if they (Taylor Woodrow, Birse Metro and Morgan Est Rail) involve tunnelling or relocation of infrastructure. were selected as alternative providers. To date, Many also require planning permission. Accordingly approximately £57million in projects have been let to we have developed a programme to progress these companies covering a number of building and multiple stations in parallel through the design civil engineering works. LU is exploring expanding this stages, so that we have a stream of projects and programme to include other alternative providers. substitutes ready to take forward. London Underground is also developing a Vendor The coming year will see physical works in progress Capital Programme to encourage and support at Finchley Central, Euston Square, Morden and competitive tendering of directly managed Hendon Central. capital investment activities. The Vendor Capital Programme will provide both existing and new Staff accommodation suppliers a common basis of understanding of future planned LU works. The scale of the capital Throughout the network there are examples of staff programme offers significant opportunities for facilities that are dilapidated, cramped and fail to new contractors, much of which will be put to meet standards. Investment in this area must be competitive tender. We anticipate publishing the addressed not only to provide staff with reasonable first part of the Vendor Capital Programme later standards of accommodation, but also to support this year. higher levels of service envisaged in the future. Some of this work is the responsibility of the Infracos, while other elements fall to LU. 62.

10.0 Government targets for 2005/06 and actual performance both including and adjusting for the Overall terrorist attacks and industrial action. performance Performance measure Target Actual Adjusted**

Overall customer satisfaction (score 0-100) 77 78 78 Excess journey time (minutes, unweighted) 3.25 3.34 3.10 Excess train time (minutes, unweighted) 1.93 1.76 1.74 Service volumes (million kms operated) 70.5 68.8 70.5 Schedule operated (%) 94.3 93.6 95.4 Peak trains cancelled due to staff shortage (%) 0.6 0.2 0.2 PPP lost customer hours (millions) 17.0 15.56* 15.56*

* LCH figure subject to revision following resolution of outstanding LCH in abeyance, however, this will not alter achievement of the target. ** Adjusted series removes the estimated effects of the July terror attacks and industrial action (worth 1.2m and 0.3m kms respectively) but includes the effects of the Northern Line ‘tripcocks’ failure which required suspension of service for The performance of the PPP is fundamental to three days. This is worth a further 0.3m kms and 0.04 mins on journey time. London Underground’s overall delivery to our customers, but it is not the whole story. While the In 2005/06 we carried 971 million customer journeys. Infracos are accountable for managing the assets As a consequence of the July terror attacks this and delivering renewals, it is London Underground figure is slightly down on the all time high of 976 that is responsible for controlling and operating million recorded in 2004/05. However the recovery the service, and turning PPP performance and in demand since July has been remarkable – by deliverables into a service that benefits customers. September year-on-year growth was positive again. By way of conclusion, this chapter sets the PPP This is a tribute to the resilience of Londoners and and Investment Programme in the context of LU’s their confidence in the tube and our staff. This is overall operating performance. further evidenced through customer satisfaction, which averaged 78 out of 100 throughout the 10.1 Performance in 2005/06 year, with an all time high of 79 recorded in the At the end of 2004/05, we achieved all the targets second quarter. set for us by Government; we had delivered one of Overall reliability improved with a further the highest levels of service volume ever delivered improvement recorded in our excess journey in a year and did all this in the context of more time metric, and operated train service volumes tube journeys being made than ever before. This comparable to the records set last year, despite performance continued into the first three months the planned closure on the Jubilee line over of 2005/06. Then London suffered the horror Christmas to lengthen all trains to seven cars.39 of the July terror attacks. Our staff performed The continued overall improvement is partly due magnificently in response to these atrocities, and to the reductions in Infraco lost customer hours the Infracos also excelled themselves in helping discussed above. It also reflects other factors: manage the service disruption, and later recovery train operator availability has continued to be of the network. Later in the year a minority of our good; signals passed at danger (SPADs) attributable operating staff followed a union call for industrial to train staff has improved by 14% in the last action which, while not actually causing the closure year, on top of the 11% improvement achieved in of the network, nonetheless had a small effect 2004/05; and active management of security alerts on performance. The following table shows our by our staff and the police has mitigated the

39. Excess Journey Time is our measure of the effects on an average journey of unreliability, crowding and queuing, compared to the length of time the average journey should take. Adjusting for the effects of the July terror attacks, this metric showed an improvement last year. London Underground and the PPP: the third year 2005/06 63.

impact of these incidents on overall performance. 10.2 Looking forward Industrial action continued at a low level in This report has detailed areas of progress in the 2005/06, and we are actively seeking a second PPP and across the wider LU programme and it has multi-year deal to provide stability for employees highlighted the challenges we are facing. There have and customers. been notable achievements in the last year, and The improvements of the last year are however there have also been disappointments. Overall our marred by disruptive one off failures, particularly the priorities remain reliability, safety and security and three-day service suspension of the Northern line the delivery of the investment programme. As we associated with the ‘tripcocks’ failure. This incident look forward to the fourth year of the PPP, the cost over a quarter of a million train kilometres third year of the TfL Investment Programme, and and caused severe inconvenience for thousands of beyond, the issues for London Underground and Northern line customers. Communications failures the Infracos include the following. were responsible for a number of lengthy delays, First, basic maintenance and reliability cannot be and changes in our operating procedures since enough of a priority for the Infracos. Reliability is the July terror attacks now mean trains must be fundamental to our service, and particularly in withdrawn from passenger service if the radio is the areas of track, signalling and rolling stock the not working. The new radio system being delivered Infracos need to demonstrate that they have the by the late running Connect PFI is now working on right maintenance regimes in place. Metronet’s track the East London line, and implementation on other maintenance performance has been particularly lines is an absolute priority. poor, leading to regulatory action. Metronet and Factors such as these, and the continuing Tube Lines also need to demonstrate that decisions occurrence of asset failures across the system, reflect whole life asset planning. albeit less frequent than three years ago, makes it Second, more work is required on cost transparency difficult to credit fully the year on year improvement and justification. We must be in a positive position to recognised earlier this year in our HSBC ‘Train prove that the Infracos’ costs reflect the value of their Operator of the Year’ Award. Our customers will delivery, and we are concerned about Metronet’s judge us on their last journey, and that is why more supply chain arrangements in this context. energy must be devoted to achieving consistently reliable performance. The Infracos need to build on their successes and apply these consistently across all areas. Metronet Throughout the last year, we have continued to appear to be making progress on their line upgrades, increase service volumes and capacity. Enhanced but their station programme is well behind. Tube services were introduced on the Central and Jubilee Lines have turned around performance on the lines, but the most notable improvement has been Piccadilly line, but have far to go with performance the lengthening of all Jubilee line trains from six to on the Northern line. seven cars – providing an overall capacity increase of 17% per train. Looking forward, the Mayor’s London Plan provides a reminder of why it is so important that the Infracos Improved reliability is essential as the investment and London Underground do not fail. The growth programme gathers pace and the number of weekend of London projected in the plan requires a robust closures increases. The provision of information transport system. In the short term this means about planned closures remains a priority for London reliability. In the longer term, capacity increases on Underground, while the Infracos’ priority must be the tube are vital and we need to examine what to ensure closures are used effectively and that the more can be achieved beyond that promised in the railway is handed back for customer service on time PPP, both in terms of train service capacity, and and in the right condition. also relieving congestion at stations. 64.

The London Plan sets out other priorities that must Finally as we look forward, 2012 and the Olympics influence our planning. The sustainability agenda is a clear milestone by which LU must seek to must be reflected in the way in which we, and the realise the benefits of investment. It is true that the Infracos, design the line upgrades. We need to PPP investment programme will not be complete ensure that capacity solutions maximise customer by 2012, but much can be accomplished. With benefit at minimum environmental cost. We also sustained funding, and commitment from our need to recognise the impact of long-term climate stakeholders, staff and contractors we can deliver change, and we are working with the Infracos to a service worthy of a world class Olympic city. address temperatures on the system.