Annual report on Metronet's efficiency and practices

PPP Arbiter report (70 pages, PDF) setting out the reasons for his finding that "neither Metronet BCV nor Metronet SSL has carried out its activities, over the period from 4 April 2003 to 31 March 2006 as a whole, in an overall efficient and economic manner and in accordance with Good Industry Practice". Metronet and London Underground had jointly sought annual guidance from the Arbiter on these questions, which will also affect future price control reviews.

The Arbiter's report notes that the additional costs claimed by Metronet exceed the threshold for an extraordinary review. It notes the prospect of claims by Metronet against London Underground for the costs of work allegedly not covered by the PPP Agreement, and suggests the necessarily incurred costs of any such additional work and the additional efficient costs relevant to an extraordinary review should be considered in "a single process".

The Arbiter had announced (2 pages, PDF) earlier in the week that Metronet was seeking specific guidance on the treatment of particular costs at an extraordinary review.

For further information or advice please contact Franck Latrémolière.

Filed under PPP Arbiter, Price controls, Public transport.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

About Reckon