Derail Prescott's tube privatisation

By our London Underground correspondent.

Imagine that you are a capitalist looking to buy a trainset. John Prescott makes you the following offer: you use your business acumen and contacts to raise £7bn; you take the business risks; you mend and update London Underground Ltd infrastructure and trains; you do the work needed to get it into shape; then at the end of a specified period of time you hand back the assets in pristine condition and walk away. Would you consider this to be a good deal? Maybe, if you were a Victorian-style charitable philanthropist or a Branson-type egomaniac.

So what exactly has Prescott proposed?

• London underground operations remain as a public sector company responsible for drivers, station staff, signal operators, network controllers, marketing
• LUL to be under the control of the Greater London Authority
• LUL will award up to three contracts to the private sector to maintain and modernise the infrastructure (track, signals, tunnels) and rolling stock
• LUL will pay the contractors for use of the infrastructure and rolling stock
• The performance regime will subject contractors to incentives and penalties.

After the obscene debacle of the British Rail privatisation, this almost looks innocuous. However, let's get back to the original question: why would investors be interested? How will they make their money? What does this mean for the travelling public and the staff?

As soon as private contractors get their hands on the infrastructure, they will begin charging LUL for use of the track, signal and stations. Presumably they can charge what they like. It's not as if the Piccadilly Line can choose an alternative, cheaper route to Heathrow. To paraphrase an old British Airways ad: "We always remember you don't have a choice". If the LUL operating company needs to fulfil its statutory obligation to provide a public service, it will have to run over private tracks and use private signals, no matter what the cost.

It's not as if the private infrastructure companies will have other customers from which to make profits. The £7bn which they will want to recoup, not to mention further profit that, after all, is their raison d'etre, will come from charging LUL. Let's run through that again. The private companies will invest £7bn that they will recover by charging LUL user fees. The Government will act as guarantor to LUL, so the money will flow from the fare payer and tax payer via the Treasury through LUL to Stagecoach or GEC! Why not just invest in the underground and cut out the middleman?

Who's going to cough up the huge sums of money LUL will have to pay to the contractors? The obvious sources are the fare paying passengers and the beleaguered staff. Authoritative transport watchdog groups have already forecast that fares will probably rise massively. And the private companies are unlikely to maintain even the meagre levels of staffing presently provided by LUL. Although Prescott has presented a sugar coated picture of things by saying that staff taken over by private companies will be protected, TUPE regulations only protect them on day one. The shock will come on day two.

Those staff who remain with LUL will not be safe either (assuming there are no further privatisations). LUL will have to find the money to pay the user fees. Don't be surprised if there is further de-staffing of stations in remote overground areas. Station staff are still under threat from a plan put into motion during the time of the last government -- the euphemistically named Project Prestige that will effectively dispense with staff in the booking offices by contracting out ticket sales!

John Prescott reassures us that the contractors will be subject to tough contractual terms, with built-in periodic reviews and crippling penalty clauses. Fine on paper, but completely meaningless in real life. Anyone working on the Jubilee Line Extension would concur. If penalty clauses had been invoked against the present contractors on the JLE, many would already be out of business. You simply cannot put a contractor out of business in the middle of a major project by applying the penalty clauses. Business does not work that way. Instead they muddle through no matter what.

We are also supposed to be enormously relieved that LUL will be responsible for safety. Sure, they will be responsible for safety policy and safety standards, maybe even training. But how will they be able to administer and supervise these standards on a day-to-day basis, on the ground where it counts? In 1990 LUL put the train cleaning out to private contractors. Managers in depots have been completely frustrated with their lack of control over the quality of the work. Imagine how much more is at stake with the contracting out of infrastructure maintenance, or rolling stock repairs? If quality control means nothing with cleanliness, how will it be exercised in the more crucial areas such as safety?

John Prescott's "third way" is being presented as a palatable compromise to improve London's transport for the Millennium. In fact, it is completely insidious. RMT members have been out leafleting the public to expose the con. We are holding a rally on Thursday 30th April, 2.00 pm at Central Hall Westminster. Please come and give us your support. It's in your interest as well.

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