15. London Underground's own PPP costs amounted to £180 million. These costs included external advice on legal, commercial advice and internal costs such as those of the corporate reorganisation that preceded the PPPs (see Figure 4). Contract negotiations took longer than anticipated, which increased the costs for all parties. Without the PPP, the Department said that London Underground would have had to negotiate separately a potentially very large number of other contracts, each with its own transaction costs.19
Figure 4: London Underground's costs
| £ million |
1. Advisers to London Underground |
|
Freshfields (legal) | 29.2 |
PriceWaterhouseCoopers (commercial) | 21.4 |
Arthur Anderson (re-organising operations) | 13.8 |
PA Consulting (re-organising engineering activities and dynamic simulation model) | 12.5 |
Ove Arup (engineering) | 6.0 |
Other firms (project management, audit, insurance, property, pension and miscellaneous technical advice) | 26.5 |
| 109.4 |
2. London Underground internal costs |
|
| 61.0 |
Effect of discounting | 10.0 |
TOTAL | 180.4 |
Source: London Underground
_______________________________________________________________________________________________________________________________________