2.10 The market interest that London Underground had created in the PPP started to fade. Adverse media publicity, objections to the PPP from Mayoral candidates and railway safety concerns following the accident at Paddington raised market fears about the Government's commitment to the PPP. These issues added to the concern of the consortia that bidding, and related investigations of the asset condition, would be expensive. Bidders would have little resource left over to bid on other business opportunities, increasing their commercial risk. By October 1999, one of the consortia interested in the deep tube concessions had withdrawn and a key member in another was considering withdrawing. Under sustained pressure from bidders, London Underground, after consulting with the Department and the Treasury, agreed to reimburse some of the bid costs.
2.11 For those bidders that received invitations to tender for Infraco BCV and Infraco JNP, London Underground initially offered to reimburse each runner-up 75 per cent of its reasonable and audited bid costs, capped at £1 million. Moreover, a pool of £4 million was established for each competition to be shared between the continuing bidders on condition that at least one of the bids came in at a lower value than that assessed for the public sector. The £4 million pool per competition was raised to £15 million to cover preferred bidders' anticipated expenditure, and then raised again to £19 million to allow for delays. At a cost of £57 million, London Underground, in all three competitions, therefore avoided finding itself in single bidder situation until it selected preferred bidders (see Figure 8). Although London Underground rejected some bidders' costs, it did not exclude all of the bidders' preliminary marketing costs (effectively 'sunk costs'). Although these had been audited, this scrutiny does not necessarily limit reimbursement to efficient and unavoidable spending - as further discussed in Part 3 (paragraph 3.18).