5 The NAO has to date produced two other reports about the PPPs. The first, The financial analysis for the London Underground Public Private Partnerships2, found that the initial financial analysis, on its own, offered useful but incomplete insights about value for money. The key findings of our further report, London Underground PPP: Were they good deals?3 are:
■ The complexity of the PPPs resulted from the scale of the work required, the decision to have output based contracts, and limited knowledge of the condition of less accessible infrastructure;
■ There is only limited assurance that the price is reasonable, reflecting the complexity of the PPPs and some uncertainty about the eventual price, but any price revisions have to meet tests of economy and efficiency and greater price certainty would have resulted in a higher price;
■ The process of negotiating the PPPs took longer than expected and was costly, but on a scale consistent with the overall deal size and complexity; and
■ The deals offer an improved prospect of upgraded infrastructure, compared to LUL's pre-1997 investment regime, and remedial work, that proved greater than anticipated, has been spread over a longer period than originally intended.
6 This report examines whether these deals are likely to work successfully in practice given the PPPs that were selected. To understand this we decided to undertake an early assessment of the PPPs, as they now stand, based around the following questions: i) are performance outcomes likely to improve?; ii) are the key success factors in place for the partnerships to work?; iii) are there any constraints to the success of the PPPs?
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2 HC54, Session 2000-2001, December 2000.