London mayor Livingstone seeks access to shareholder meetings, in order to slam £13bn PPP deal.
by Mark Leftly and Phil Clark in Brighton London Mayor Ken Livingstone is threatening to buy shares in companies bidding to refurbish the Tube, so that he can denounce the public-private partnership plan at their annual meetings.

Livingstone believes that this would increase the pressure on the government to pull out of the £13bn PPP deal.

Susan Kramer, a board member of the mayoral body Transport for London, said: "If TFL has no access to Tube discussions then it might be one method to make inquiries – we might turn up and ask questions, raise issues. The message is: we ain't going quietly."

The Greater London Authority is not expected to buy large number of shares, just enough to gain entrance to annual and emergency meetings.

Livingstone and TFL commissioner Bob Kiley subjected the PPP to another round of scathing attacks at the Labour Party conference this week.

Livingstone said the latest contract to refurbish the Tube system was a "scandalously bad deal" that meant bumper profits for contractors.

Speaking at a GLA fringe meeting in Brighton, Livingstone claimed that the deals gave consortiums the chance to make a 35% return.

Livingstone said: "The rate of return on this latest contract is 35%. PPP is all about transferring risk to the private sector – I am not surprised they will take this deal when the returns are that good.

"It looks as though billions and billions of pounds are being poured in, but only 55% of the public funding for the Tube will actually be spent on improving the Underground. That's not a good deal by any stretch of the imagination … that's a scandalously bad deal."

That’s not a good deal … that’s a scandalously bad deal

London mayor Ken Livingstone on the PPP

The dispute comes in a week when the Labour government's commitment to PPP and the PFI has came under scrutiny.

Kiley also claimed that the government was now discussing changes to the PPP contracts that would relieve the consortiums of the responsibility for raising capital after seven-and-a-half years of the contracts had elapsed.

Kiley said he took the view that Tube firms with 15-year contracts should be obliged to pump money into the system for the duration of their contracts. If they were allowed to renege on that responsibility, there could be disastrous effects.

He said: "If this is what you end up with after a seven years, you could be in a worse position than you were at the start."

Kiley said he had not yet decided if he would stay on as TFL boss once the three PPP contracts have been signed early next year.

"I don't know if I would have the capacity to manage that monumental contract," he admitted. "It's not clear how you can do it – whether London Underground oversees the work or what the role is for Transport for London. There are no easy answers because the proposals are so convoluted."

Kiley described the PPP deals as "the most complicated contract system in the history of Western civilisation". He added: "The government has created a new industry of contract managers in London."

A spokesperson for the Metronet consortium dismissed the mayor's claims, describing the figures he cited as "absolute rubbish". He said: "They have no foundation whatsoever. His figures are nowhere near the mark." The Metronet consortium includes WS Atkins and Balfour Beatty.