A4.3 | In the first year, performance payments to the Infracos are, as expected, small in comparison to the overall service charges
In their bids, the Infracos estimated that their net performance payments in the first year would range from -£10.4 million (Infraco JNP) to +£4.9 million (Infraco SSL). In all cases, the Infraco anticipated that net performance payments/abatements would not exceed 3 per cent of the overall Infrastructure Service Charge, reflecting the fact that the impact of capability upgrade incentives does not kick in until later periods when major upgrade projects are expected to be delivered. As Figure 10 shows, net payments/abatements in the first year are in line with Infraco expectations, with a worst case total - assuming all payments/abatements that remain to be agreed all go in LUL's favour - of a net total 2 per cent deduction from the Infrastructure Service Charge across the three Infracos.
10 | EARLY SERVICE CHARGE PAYMENTS TO THE INFRACOS |
| Net payments/abatements for Infraco performance in the first year of the PPPs are in line with Infraco expectations, and will reach a maximum of 2 per cent of the overall Infrastructure Service Charge |
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| Notes 1 The figures quoted in the table are derived from 2003/04 Infrastructure Service Charge invoices that LUL had received from the Infracos, and agreed, at May 2004. The bonus and abatement numbers exclude performance payments and abatements resulting from cancelled or delayed access - see case example 5 for more on this. 2 Forecast for performance as per bidder's final financial models, against which the parties assess the Infraco's planned performance. Source: London Underground Limited |
