Will the tax payer need to bailout the London Underground?
News that improvements to the London Underground which are planned for 2010 - 2017 will cost an extra £1 billion more than official estimates has led to suggestions that the UK taxpayer will be forced to bailout the project. This is yet another of the Labour led public private partnerships (PPP) which is set to leave the tax payer with a massive bill to pick up. So what has gone wrong?
It seems as though Transport for London (TfL) had estimated that the cost would be around £4.1 billion when the official PPP arbiter had suggested the figure would actually be in the region of £5.5 billion. The project was then tendered on the lower price and now it seems that payment will need to be topped up to ensure the project is successful.
A number of schools and hospitals, to name but just two examples, have been built under the PPP initiative despite concerns that this will leave tax payers out of pocket in the long run. Only now are we seeing chickens coming home to roost and the deferment of expense set to blow a hole in already over stretched public funding.
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