Business Weekly - Cambridge, UK

The Government’s PPP plans would see the Tube network split into three parts-Infraco BCV and JNP - and lease it to different private sector groups

AWG has submitted its bid for the Infraco contract, and will find out on 2 May whether the Government has approved it.

The move represents a growing in confidence for AWG, which has sought over the past four years to diversify its operations beyond its water business to include asset and infrastructure management.

Chris Mellor, Chief Executive of Anglian Water said: “AWG is part of a consortium bidding in the ‘Intraco competition’ for the London Underground. We would not actually be running the trains, but managing the infrastructure including the track and the signals.

“AWG has embarked on a journey to expand its skills base and knowledge in the management of assets, infrastructure and large capital programmes.

“We have sought to leverage our existing skill in network management into other business areas - including utilities and other related infrastructure, but also transport.”

London Mayor Ken Livingstone has made no secret of his antipathy toward the proposals, and is taking a judicial review of PPP to the High Court. A hearing is likely just before an expected June general election.

Livingstone said: “PPP is ultra expensive, inefficient and potentially unsafe. It gives priority to stations, with improvements to service on many lines delayed for 10-20 years, when what passengers and businesses desperately want is for people to travel safely, quickly and cheaply.”

Livingstone favours a single, publicly controlled management structure placed over private sector partners.

It is unclear how, if at all, the eventual outcome of the judicial review would affect AWG’s bid.

Despite only having moved into the sector four years ago, AWG has made a success of its infrastructure management activities. In the last financial year the business generated £10 million profit on a turnover of £100 million.

Mellor believes that AWG is well placed to capitalise on its growing reputation in the market, but refused to be drawn on what he described as a political issue.

He said: “The London Underground/Intraco bid is a pretty controversial project but we are definitely in the running, having built up a group of facility management businesses that provide a whole range of service to industry and local government.

“It doesn’t matter if you’re a water company, an electricity company, London Underground, Railtrack, a hospital trust or a school - if you’re looking to build an asset and have someone operate it for you, then AWG can do that. That allows the rail company to concentrate on running the trains, while AWG can maintain and run the network, and also finance it.”