Metronet, a company set up to manage the upgrade of three-quarters of London's tube network, has gone into administration (which is similar to Chapter 11 in the United States) after having accrued debts of up to £2 billion, following the decision on Monday to limit the amount of extra funds that the company would receive from public funds.
A notice on the Metronet website announced that the Boards of both Metronet BCV (responsible for the upgrade of the Bakerloo, Central and Victoria lines) and Metronet SSL (responsible for upgrade of the 'sub-surface' lines) had asked the Mayor to seek the appointment of a PPP Administrator. The statement says that the decision follows a period of 'financial uncertainty', with the decision of the arbiter leaving Metronet "unable to carry out its contract".
Metronet's shareholders, the companies Atkins, Balfour Beatty, Bombardier, EDF Energy and Thames Water had blocked access to an extra funds, and each have a limited liability of £350 million, their original equity stake.
Transport for London have reassured the public that tube services will not be affected - Metronet is not responsible for day-to-day operation - but it is so far unclear what will happen to the upgrade contracts.
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UK tube company Metronet goes into administration