2.22 As a result of market reservations about the timetable, noted in October 1998, London Underground re-set target completion from April to December 2000. As shown in Figure 2.1, the procurement exercise lasted 45 months, from the July 1999 pre-qualification date (60 months overall). Settling the position of Railtrack and the need to revise deep tube bids after BAFO to meet affordability criteria extended the timetable. Revisions to bids were sought a second time from identifying and addressing - before it was too late - constraints on the ability of LUL to provide the power required by initial proposals for new trains. There was then a long gap between the award of preferred bidder status on the contracts and their completion. Some concerns of both bidders, and most notably of Metronet which, unlike Tube Lines, had to approach the capital markets, took time to resolve. The two judicial reviews and contested state aid proceedings led to further unplanned delays.
2.23 The Government indicated in its submission to the European Commission that certain changes to the PPP requirements might have increased the price of the contracts for the preferred bidders, indicating £590 million as its maximum extent from award to commercial close:
■ The maximum increase in the net present value of the JNP contract after the time of award was £140 million (or 2.2 per cent) over 30 years.
■ The maximum increase in the net present value of the BCV contract after the time of award was £280 million (or 6.8 per cent) over 30 years.
■ The maximum increase in the net present value of the SSL contract after the time of award was £170 million (or 3.5 per cent) over 30 years.
2.24 Transport for London's advisers, based on information provided during consultation, calculated that the infrastructure service charge would come out £711 million higher than at the award of preferred bidder status. Unlike London Underground, Transport for London also attempted to put values on: changes in the profile of Infraco costs; areas where bidder risk reduced; potential bidder bonuses; and adjustments to the rates of return. London Underground rejected the approach adopted by Transport for London to quantify bid changes on the basis of the lack of probability analysis, and failure to include benefits secured during the negotiations, to arrive at an overall outcome.
2.25 London Underground tested the reserve bidders' proposals against the scope changes and concluded that the expected price impact, had they been required to price the changes to the PPP, would have been similar to those of the preferred bidders. In April 2002, the Government sought confirmation from the European Commission that the PPP arrangements did not constitute 'state aid'. After its review of the Government's submission in October 2002, the European Commission concluded that "an open, transparent and non-discriminatory tendering process occurred" as part of the procurement. Moreover, the Commission stated that any increases in value during the negotiating period with the preferred bidders did not detract from the conclusion of a deal representative of a market price.