On May 8, 2:34*pm, Benamin wrote:
He quite reasonably asks where TfL will find the £310 million from to
buy Tube Lines, given that TfL said they were going to struggle
finding the £400 or so million for the Tube Lines funding gap (as
determined by the PPP arbiter).

Surely TfL weren't expected to pay the £4.46bn upfront for a 7 year
programme! [...]

Well no, of course not!

[...] The £400m shortfall was on top of the £4bn TfL had budgeted
and were willing to pay for the infrastructure works. Surely the £310m
would simply come from this years payment to Tubelines for their work,
AIUI.

That doesn't follow - the payments from LU to Tube Lines are for work
to be done. If that money is simply diverted to the current owners of
Tube Lines so as to pay for the purchase of the company (i.e. to pay
for the shares), then that money won't be available for the newly LU-
owned Tube Lines to use to pay for those works. Therefore if that
money would simply come from this years payment, then £310 million
less worth of work would be done on the relevant part of the network
(Jubilee, Northern and Piccadilly lines).

However, one does rather suspect that this will contribute towards a
scaling back of the upgrade programme. Boris might well argue with the
to-be-newly installed Tory Chancellor Osbourne that this PPP mess was
not of his (or indeed his predecessors) making, but that of central
governments, and therefore they should stump up the extra cash -
indeed this is more or less what Boris has already argued with the
outgoing Labour Chancellor Darling (and whilst things were at an
earlier stage, Ken was putting forward such arguments too). However,
given the coming age of austerity, I wonder if Boris would really put
forward such an argument that strongly given the circumstances - and
if he did I suspect it would be done quietly rather than publicly
(i.e. loudhailer negotiations would be a ting of the past). That said,
it is Boris, so who knows...

(Of course all the above is in the context of there being an incoming
Tory administration of some sort, but given that that's what's going
to happen, I didn't feel the need to add any caveats in. Well, apart
from this one!)