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Lord Macdonald of Tradeston moved Amendments Nos. 422 and 423:


Page 98, line 2, at end insert--
(“( ) an agreement with respect to the provision or retention, or financing, of regular scheduled railway passenger services operated by a London transport body;
( ) an agreement with respect to the provision or retention, or financing, of regular scheduled railway passenger services operated by a person other than a London transport body on track used for the provision of regular scheduled railway passenger services operated by a London transport body (whether or not the track is also used for other purposes);").
Page 98, line 10, at beginning insert--
(“In this section “London transport body" means--
(a) London Regional Transport;
(b) Transport for London; or
(c) a subsidiary of London Regional Transport or Transport for London;
and, subject to that,").

On Question, amendments agreed to.

Clause 182 [Amendment of franchise agreements to take account of the Authority]:

Lord Macdonald of Tradeston moved Amendment No. 424:


Page 99, line 43, at end insert (“Transport for London,".").

On Question, amendment agreed to.

19 Oct 1999 : Column 1055

Clause 185 [PPP agreements]:

Lord Macdonald of Tradeston moved Amendment No. 425:


Page 102, line 9, leave out subsection (2) and insert--
(“(2) At least one of the parties to the contract must be a relevant body for the purposes of this Chapter, that is to say--
(a) London Regional Transport;
(b) Transport for London; or
(c) a subsidiary of London Regional Transport or Transport for London.").

The noble Lord said: My Lords, I beg to move Amendment No. 425 and I shall also speak to Amendments No. 425B in substitution for Amendment No. 425A, and to Amendments Nos. 428 to 433, 440 to 446, 449 to 451 and 467. This group of amendments is largely technical in nature and relates to the PPP agreements, key system assets and leases.

The first section of this group of amendments--Amendments Nos. 425, 428, 429 and 467--extends LRT and TfL's powers under Clauses 185 and 189 to enter into PPP agreements and designate key system assets to London Transport and TfL subsidiaries.

Amendment No. 425B, on public sector operators, replaces Amendment No. 425A which was put down on Wednesday last week and unfortunately omitted the key words “a PPP company". I apologise for having to make this correction at this late stage, but those words are essential in order that other sections of the Bill which refer to subsection (5) of Clause 185 are correct.

Amendment No. 425B is necessary to allow the PPP agreements to be entered into while infrastructure companies are still subsidiaries of LUL and, as such, are classed as public sector operators. As currently drafted, Clause 185(5) excludes public sector operators from entering into PPP agreements.

In regard to Amendments Nos. 430 to 433 on key system assets, we have been considering the burdens which Clause 189 of the Bill places on Transport for London and consider that the proposed arrangement may be unnecessarily bureaucratic. These amendments give TfL the choice of providing a register of assets or copies of the designation documents.

Amendments Nos. 440 to 446 are mainly technical amendments, designed to avoid uncertainty in the treatment of PPP leases.

Finally, Amendments Nos. 449 to 451 are technical amendments deleting provisions which were included in the Railways Act provisions on which Schedule 11 is based, but are not necessary for the PPP administration orders.

I commend these amendments to the House. I beg to move.

Earl Attlee : My Lords, the Minister has described this group of amendments as technical and, by implication, innocuous. Does he realise that if the House agrees Amendment No. 425, my Amendment No. 426 would be rendered defective? That annoys me

19 Oct 1999 : Column 1056

a little, but there we are. However, we shall look at these amendments very carefully to make sure that they are indeed technical.

On Question, amendment agreed to.

[Amendment No. 425A not moved.]

Lord Macdonald of Tradeston moved Amendment No. 425B:


Page 102, line 24, leave out subsections (5) and (6) and insert--
(“(5) If a party who undertakes to carry out or secure the carrying out of any or all of the work mentioned in subsection (3) above (a “PPP company") is a public sector operator at the time when the contract is made, that party must no longer be a public sector operator on the day following the expiration of the period of six weeks beginning with the day on which the condition in subsection (7) below is satisfied.").

On Question, amendment agreed to.

10 p.m.

Earl Attlee moved Amendment No. 426:


Page 102, line 32, at end insert--
(“(8) Transport for London may only enter into a PPP agreement with any party after a process of competitive tendering has taken place, such tenders in an abbreviated form to be available for inspection by members of the public following the conclusion of the tendering process.").

The noble Earl said: My Lords, I rise to move Amendment No. 426 standing in the name of my noble friend Lord Brabazon of Tara. The amendment is designed to ensure transparency and prevent a cosy deal being struck on a politically-influenced basis by forcing the tendering system into the open but with proper safeguards to protect commercial confidentiality. It will ensure transparency and the best value for money for the public.

As I intimated earlier, the last group of government amendments indicate that agreements may be signed by subsidiaries and not just TfL only. In view of that, I shall accept the Minister's criticism that my amendment may now be defective. I beg to move.

Lord Macdonald of Tradeston: My Lords, this amendment has two separate strands. The first part relates to competitive processes and would not allow TfL to enter into a PPP agreement with a company unless it had run a tender competition.

As a general point the Government agree that best value is normally achieved through having a competitive process. However, there are certain circumstances where there is particular merit in pursuing negotiations bilaterally. The discussions that London Underground is having with Railtrack, where the aim is to explore the scope for integration of the Underground's sub-surface lines with the national railway network, is such a case. We feel therefore that it would not be in the best interest of Londoners to impose an obligation of the type suggested.

The second element of the amendment requires TfL to publish summaries of the tenders once the competition has been completed. It is not normal practice to publish details of tenders as much of the information they contain is commercially sensitive. We understand the desire for the award of contracts to

19 Oct 1999 : Column 1057

be undertaken in a way that demonstrably delivers best value to the public purse. But an obligation to publish a summary of tenders is not desirable. Rather, I can offer the reassurance that the competitive process will be subject to scrutiny by the National Audit Office in the normal way. I therefore ask the noble Earl to withdraw the amendment.

Baroness Hamwee: My Lords, before the Minister sits down, is he able to tell the House whether other public bodies which have to deal with tendering publish the tenders? I am thinking particularly of local authorities which do not in fact publish summaries of tenders because, although the commercial aspects will not be discussed publicly, other aspects may be discussed in committee and therefore in public.

Earl Attlee: My Lords, I thank the Minister for his response. I shall read carefully what he said. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clement-Jones moved Amendment No. 427:


After Clause 185, insert the following new clause--

CONDITIONS FOR ENTRY INTO PPP AGREEMENT

(“ .--(1) Before any PPP agreement is entered into the Secretary of State shall have carried out an economic assessment in respect of the life of the agreement which demonstrates that such PPP agreement represents value for money at least comparable to that which would have been available through a publicly financed arrangement."
(2) Such assessment shall be published by the Secretary of State immediately after the relevant PPP agreement has been entered into.").

The noble Lord said: My Lords, Amendment No. 427 is a refinement of an amendment put forward from these Benches at Committee stage in July. It is designed to ensure that a public sector comparator is carried out for a PPP agreement before it is actually entered into, and then as soon as it has been entered into, it is published. An understanding of the risk being transferred by a PPP agreement is clearly crucial to an assessment of the benefits of PPP or PFI agreements. Many of the doubts about PFI agreements concern the question of whether the risk transferred to the private sector is adequate to justify the additional costs to the public purse of the PFI or PPP agreements. It is that which makes having a comparator compulsory in these circumstances of such crucial importance.

At Committee stage the Minister said that there was no difference between us in principle as regards the carrying out of a comparator. He said:


    “We have no intention of proceeding with any aspect of the PPP unless we are convinced that the contracts offer best value for passengers and taxpayers".

He went on to say,


    “We are committed to conducting a public sector comparator exercise".--[Official Report, 1/7/99; col. 561.]

On that score there can clearly be no doubt. However, he took exception to the timing. He did not believe that there should be publication before the PPP agreement was entered into, and he objected to the exercise being carried out by the GLA. Hence the amendment allows

19 Oct 1999 : Column 1058

the Secretary of State to carry out the comparator and for that comparator to be published not before the agreement is entered into--there seemed to be a view that it was commercially sensitive to do it at that time--but afterwards.

Therefore, having amended the amendment, so to speak, to ensure that it complies exactly with his requirements, I ask the Minister what objection there can be in principle to this being included on the face of the Bill? It is clearly of great importance that we have this clarity and transparency about any PPP agreement which is entered into. Equally, it is of vital importance that it should be established to be of at least as good value as any public financing. I look forward to hearing the Minister's acceptance that this is a sensible amendment and one which should be included on the face of the Bill. I beg to move.


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