Multi-billion pound funding package for London's transport network confirmed

The government has confirmed that £39 billion will be available for renewal and expansion of London's transport network in the period up to 2017/18. This will cover Crossrail, modernisation of the Tube, Olympic preparations, expansion of rail and bus services, and programmes to promote walking and cycling.

The announcement by Secretary of State for Transport Ruth Kelly stems from the recent Government Comprehensive Spending Review. TfL will receive £33 billion in grant from the Department for Transport, and will be allowed to borrow a further £6 billion

The Mayor of London, Ken Livingstone said: "London's transport network underpins the capital's economy, which benefits the whole of the UK.

Crucial role

"This settlement recognises the crucial role that transport plays in London's economic success, and the importance of completing the renewal and expansion of the network that we have been driving forward since 2000."

Peter Hendy, London's Transport Commissioner said: "This 10-year funding settlement will enable Transport for London to continue with the huge investment programme that is modernising and extending the Capital's public transport system, including Crossrail, upgrade of the London Underground and preparations for the 2012 Olympics.

"Such a major programme of investment will enable us to support London's continued economic growth and development as one of the world's leading cities.

"This will build on the significant improvements that have already been delivered to bus and Tube services, extension of the Docklands Light Railway and more rail capacity through our new London Overground services."

Significant progress

The current TfL Investment Programme runs until 2010.

The detailed TfL programme beyond 2010 will be worked up over the coming months.

Significant progress was also made today towards bringing Metronet out of Administration. Metronet's lenders have exercised their Put Options under the PPP contracts.

London Underground (LU) will now pay around £1.7bn to Metronet's lenders and Government has provided an additional grant of £1.7bn as part of TfL's funding settlement to cover this.

Safely and reliably

LU Managing Director, Tim O'Toole said: "Our priority remains the removal of Metronet from PPP Administration as quickly as possible.

"A great deal of progress has already been made and we remain on track to transfer the two Metronet companies to two dedicated Transport for London companies in the early part of 2008.
"Tube services continue to operate safely and reliably for passengers, as they have done throughout the period of PPP Administration.

"Nothing will hold up the transfer of Metronet to Transport for London once all the necessary steps in the administration have been taken.

"Once under Transport for London control, we will work with the Mayor and Government to restructure Metronet's contracts to deliver track, train and signalling upgrades to increase capacity, along with station and security improvements."