London rail chief wants to end Alstom contract

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Mojo

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LONDON, Oct 17 (Reuters) - London's top transport official has called for the end of a 400 million pound ($700 million) contract with French engineering firm Alstom (ALSO.PA: Quote, Profile, Research) to maintain the network's busiest rail line.

Transport for London (TFL) Commissioner Bob Kiley said the contract should be terminated following severe disruptions on the Northern Line underground link last week due to problems with a braking system.

"The contract with Alstom should be terminated. It isn't right that you can be truly responsible for train operations without having responsibility for the maintenance and renewal of the physical plant," a TFL spokesman said on Monday, quoting Kiley.

Any final decision, however, to end the contract would rest with Tube Lines, a consortium responsible for maintaining and upgrading the rail network.

"We are looking at it (the Alstom contract)," a Tube Lines spokeswoman said, but declined to comment further.

Kiley has been a long-time opponent of the public-private partnership (PPP) scheme which has been responsible for the rail system for the past two years.

The 20-year Alstom contract is worth about 400 million pounds and was signed in 1995.

There may be grounds to terminate the contract early without having to pay Alstom compensation, a source close to TFL told Reuters.

"If a contract is terminated there is obviously a need to pay compensation. However, when it is a safety-related cause there are pretty strong grounds for termination," the source said.

TFL answers directly to the mayor of London and is responsible for operating the underground, employing drivers and station staff, ticketing and safety.

Alstom's shares were up 0.4 percent at 40.02 euros in late-morning trade, in line with the French stock market.
 
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yorkie

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if it is terminated, Alstom should get no compensation. On the contrary, they should be paying compensation!
 

andrewmay

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I agree Yorkie. Just imagine how much disruption closing the Northern line caused and from that, how much it cost LU. Surely they should compensate for those costs. I'm not really liking Alstom much at the moment, especially for me with the introduction of the Pendolinos and the problems plaguing them.

Cheers,
Andrew
 

TomCrame

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There's one small problem. Alsthom built the trains under a PFI contract. More than that, the contract was for (AFAIK) design, build and maintain for a period of time then the trains would become LU's property (now Tube Lines). If the contract is terminated prematurely, then surely the trains would continue to be owned by Alsthom and Tube Lines would have to hire/lease them, thus causing even more problems?
 

yorkie

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TomCrame said:
There's one small problem. Alsthom built the trains under a PFI contract. More than that, the contract was for (AFAIK) design, build and maintain for a period of time then the trains would become LU's property (now Tube Lines). If the contract is terminated prematurely, then surely the trains would continue to be owned by Alsthom and Tube Lines would have to hire/lease them, thus causing even more problems?
Isn't there some sort of get out clause in the case of poor/abysmal performance? If not, this is a massive oversight surely?
 
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They shouldn't have the problem as the Victoria Line's upgrade will involve upgrading the signalling to ATP which invalidates the need for trainstops on the line.
 

TomCrame

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This would be the same Victoria line which even today only has three trainstops (all fixed) on the entire line? ;) (For those who really care they are leaving Northumberland Pk Depot and South of Finsbury Park.
 
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