Failing Tube system posts record profit

LONDON UNDERGROUND yesterday announced record "profits" of pounds 265m last year while failing to meet nearly all government-agreed performance targets.

In the 12 months up to March, 100,000 extra passengers used the Tube - growth fuelled by the booming London economy - but the ailing system proved incapable of dealing with the record numbers. One of the biggest problems is the time spent queuing for tickets, according to London Transport's 1997-98 annual report.

In order to alleviate the strain, the system will get more money. Executives outlined plans for a pounds 1bn cash injection over the next two years to improve the network, which carries nearly two million passengers a day.

Key routes such as the Northern line will get new trains, a dozen central London stations will see their lifts and escalators upgraded and 22 stations will receive face-lifts.

Also planned to get off the ground in the next two years is the Prestige project. This will see LU selling a smartcard that passengers can charge up with cash and use on every form of transport - including black cabs, trams and overground train services. The contract to design the system is to be awarded this month.

However, commuter journeys are likely to get worse before they get better. "There will be some disruption while work is being done," said Dennis Tunnicliffe, the new chief executive of London Transport.

Some experts, however, said the money was merely a "sticking plaster to keep the Tube from falling apart".

"I do not think the pounds 1bn spread over the period is going to have any qualitative effect," said Maurice Fitzpatrick, a partner with the accountants Chantrey Vellacout.

Mr Fitzpatrick pointed out the only new money was pounds 365m found by Deputy Prime Minister John Prescott - well short of the pounds 1.5bn he says is needed to transform the system.

Mr Prescott has said he will modernise the Tube by leasing the trains, track and stations to the private sector. LU, which remains in public hands, will then pay the private companies - who will use the money to upgrade the system. Mr Prescott says this will generate pounds 7bn over 15 years.

The proposed "public-private" partnership has angered the Rail Maritime and Transport (RMT) union whose Tube members are striking for 48 hours from Sunday evening - virtually closing down the system. The RMT says pay and conditions will "be squeezed" to make money for private firms.

LU says contracts are likely to be signed in April 2000, just before a mayor of London would be in place. Mr Tunnicliffe said the Government would make it "impossible" for a left-wing or Tory mayor to stop Mr Prescott's plans.