Begging bowl capitalism at Metronet

Day two of the strike. Here’s the take of Socialist Appeal

Metronet: A bad case of Begging bowl capitalism
By Mick Brooks and Dan Morley
Tuesday, 04 September 2007

The collapse of Metronet , the consortium entrusted with upgrading the tube, spells the collapse of the whole notion of ‘Public Private Partnership’, otherwise known as the Private Finance Initiative.

Metronet (corporate motto ‘Hallelujah, I’m a bum’) is a consortium with a £17 billion contract to upgrade most of the system. They have come back with the begging bowl claiming costs have overrun. They wanted £551 million more (for the time being), they were ‘only’ offered £121 million. So they’ve gone belly up, leaving the underground in a pickle. They are also leaving us a little present of £2 billion debt.

How did they get the job in the first place?

New Labour insisted the private sector get involved. They have an ideological belief that private is better than public. Their misguided ideology is in danger of costing us all £2 billion.

The government case for PPP is as follows:

  • We haven’t got the money. The private sector will be able to raise it on the money markets.
  • The private sector is more efficient than public provision. They will deliver at the price and on time.
  • Why are they efficient? Because they compete with one another. Because their managers are skilled entrepreneurs.
  • The private sector will take all the risks. We can just sit back and let them get on with it.
  • The Metronet collapse shows:

  • It’s always our money that pays for infrastructure in the end. Does Gordon Brown think they just wave a magic wand at the money markets? We will have to pay the borrowing back – with interest.
  • Metronet are greedy parasites, forever begging for government handouts. In the consortium are the usual suspects including Balfour Beatty – the firm in charge of rail maintenance whose negligence led to a train derailment at Hatfield in which four people died. Do they sound like the right people for the job?
  • Another firm involved in the consortium is Thames Water. What do they know about running a railway? Come to that, what do they know about running a water supply? At Thames Water one gallon in three still leaks out of the system. They don’t care about the waste – they just charge us more.
  • They don’t compete with each other. They are given a monopoly over the renovation of certain lines. How could it be done any other way? Competition could not possibly work. The whole point about the tube is that it needs to be an integrated system
  • So Metronet got the maintenance contract. Who did they dish the work out to? They subcontracted it to Balfour Beatty, to Thames Water…to themselves. Competition indeed!
  • In the end we take all the risk. A couple of weeks ago some tarpaulin fell down on the Central Line and trapped a train in the tunnel for a couple of hours, a nasty experience for the passengers, and risky. What was the tarpaulin doing there in the first place? Then the District Line had to be closed because a tree fell on the track near Earls Court. Metronet had been warned about it. Laurel and Hardy show more entrepreneurial skill than this shower!
  • Now we’re facing the risk of stumping up to pay for Metronet’s incompetence. Even Gordon Brown knows we have to have a functioning public transport system in London. Metronet can walk away from the train crash, but we’ll have to sort out the mess somehow.
  • It now appears that Metronet want to dump the consequences of their failings onto the workers, by cutting jobs. So the very people upon whose labour the Tube relies should be sacked, in Metronet’s eyes, to solve the problem. Thus the profits of Metronet come before the functioning of the Tube, an essential public service. This is the logic of the PPP scheme.

    However, the Tube workers have shown they know what is really best for public services by taking industrial action. On August 20th, members of RMT, TSSA and Unite voted by 1,369 to 70 for strike action to defend jobs. RMT leader Bob Crow said “The work our members do is crucial not only to the day-to-day operation of the Tube but to the urgent upgrades that are slipping further behind schedule, and any further fragmentation of the workforce is out of the question. If we want a world class Tube…the only sensible answer is to bring the work back into the Public Sector.”

    Only the militant action of workers can fight the PPP scheme and deliver the public services we need.



    2 Responses to “Begging bowl capitalism at Metronet”

    1. V Says:

      New Labour seems pathologically wedded to PFI and full privatisation, despite all the evidence to the contrary that shows how this process actually wastes more money, produces a worse service, and destroys workers’ morale/ pensions.

      And this from a government that proclaimed that it was beyond ideology! yet the only ideology it seems to beyond or hostile to, is its own fairly moderate social democratic past. It truly is the true heir of Thatcher, no wonder the Tories can no longer get elected, they have been superseded by New Labour.

    2. charliemarks Says:

      And the reason for the fall in membership and voter turnout for Labour is probably connected to this hatred of social democracy. The other day when Brown was at his press conference talking about the two factions within the tory party I wondered wether he meant Cameron’s New Tories and his own New Labour.

      He’ll have Liberals and Tories in his cabinet — will he have us a national government?

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