According to the House of Commons Public Accounts Committee in the British parliament, “poor and inadequate” management by the Department for Transport (DfT) of Metronet – the company contracted to do maintenance on large parts of London’s underground railway – cost taxpayers hundreds of millions. A warning in 2004 by the National Audit Office (NAO) about overseeing tube upgrade work was ignored, MPs were told.  Metronet, which was responsible for maintaining nine underground lines, went into administration in 2007.
Chairman of the committee Edward Leigh was quoted saying: “The taxpayer has lost up to £410m as a result of the DfT’s inadequate management of the risks arising from the Metronet contracts for upgrading the infrastructure of the underground. This committee finds it unacceptable that the department ignored the warning by the National Audit Office in 2004 to avoid a hands-off approach to overseeing the upgrades.
“The department’s assumptions were flawed from the outset. It was naive in assuming that Metronet would establish strong financial management and corporate governance. And its assumption that Metronet’s lenders would exert strong influence on Metronet’s governance and financial health in order to protect their investment was undermined because the department shouldered 95% of the lenders’ risks,” he added.
The way Metronet was handled by the DfT exposed it to “big financial risks”, Leigh said.  ”These mistakes must never be repeated on future large contracts and government departments must establish and exercise the right to intervene where problems of this magnitude occur.”
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Original article [Railways Africa]