Glossary

Ambience

An output measure covering the quality of the environment for passengers, including the cleanliness and general condition of trains and stations, and the provision of passenger information.

Availability

A measure of passengers' total additional journey time resulting from disruption caused by incidents attributable to the Infraco.

Base costs

London Underground's estimate of what it would spend to enhance, maintain and manage the infrastructure over 30 years in accordance with the PPP performance specification.

BCV

Bakerloo, Central, Waterloo and City, and Victoria lines.

Best and final offers

The final bids made in the competition between private sector bidders.

Capability

A performance measure of the infrastructure's ability to support train services. It is based on average journey time per passenger, for a given time of day, and for a given line or part of a line.

Cost of capital

The rate of return implicit in the sums repayable by an organisation to those bodies that provide it with funding.

Deep tube

BCV and JNP lines.

Discount rate

The percentage rate applied to cash flows to enable comparisons to be made between payments made at different times. The rate quantifies the extent to which a sum of money is worth more today than the same amount in a year's time.

Efficiencies/efficiency factors

Monetary adjustments to the public sector comparator base costs and the risk adjustments to reflect the extent to which management can reasonably foresee being able to deliver the infrastructure services in the public sector at a lower cost in the future.

Health and Safety Executive

The statutory body which includes HM Railways Inspectorate and is responsible for accepting and enforcing London Underground's railway safety case (the statement which sets out how it will handle safety).

Infrastructure companies (Infracos)

The three organisations (BCV, JNP and SSL) responsible for delivering infrastructure services to London Underground under the PPP contracts.

Infrastructure

Railway, trains, stations and depots on London Underground's network (including track, signals, tunnels, bridges, embankments, platforms, escalators, lifts).

Infrastructure service charge

The amount payable under the PPP contract by London Underground to the Infraco, as adjusted from time to time, to cover the Infraco's costs of maintaining, renewing and upgrading the infrastructure, including overheads, profit and financing costs.

Infrastructure operation/service

Work to maintain, renew and upgrade the infrastructure so as to deliver the outputs required under the PPP contract, to progressively reduce and eliminate the existing backlog in asset maintenance, and to deliver a continuous overall improvement in asset health, capability and reliability in service.

JNP

Jubilee, Northern and Piccadilly lines.

London Transport

London Regional Transport - a nationalised industry currently responsible for London Underground and answerable to the Department of the Environment, Transport and the Regions.

London Underground

London Underground Limited - a subsidiary of London Transport - responsible now and in the future for operating passenger trains and stations and being responsible for safety. It intends to award PPP contracts to private sector bidders and will be their public sector partner under those contracts. After PPP contracts are signed, it will remain in the public sector but will be transferred to Transport for London.

Long Term Investment Plan

London Underground's 30 year plan for the major projects and other capital expenditure which they estimate will be required to meet the PPP performance specification; private sector Infracos are not bound to adhere to this plan.

Output(s)

Capability of the train service; availability and ambience of train services and station services; improvements in asset health.

Periodic review

A provision in the PPP contract which, every 7½ years, allows London Underground's payments to the Infracos to be reset to take account of changed circumstances and cost increases which an "economic and efficient" Infraco would incur.

PPP

Public Private Partnership. Specifically, the partnership between the public sector London Underground and the private sector infrastructure companies under the 30-year PPP contracts.

PPP performance specification

The levels of output which the Infraco is required to deliver under the PPP contract, covering "ambience, availability and capability" for train and station services.

Public sector comparator

A benchmark against which value for money is assessed. It is typically a cost estimate based on the assumption that assets are acquired through conventional funding and that the procurer retains significant managerial responsibility and exposure to risk. In this case, it is London Underground's estimate of the cost to the public sector of procuring the maintenance, renewal and upgrade of the infrastructure so as to deliver the PPP outputs. Separate comparators exist for raising finance through (a) traditional funding such as public sector grant and (b) long term bonds.

Reputational externality

The estimated cost impact that additional borrowing would have on the Government's reputation for financial prudence.

Risk adjustments/ risk factors

Monetary adjustments to the public sector comparator's base costs to reflect the probability that, due to unforeseen events, services will not be delivered by the public sector Infraco at the cost shown in the base estimates. These adjustments are only included for risks that London Underground believes it will transfer to the private sector under the PPP contracts.

Sub-Surface Lines (SSL)

Circle, District, Metropolitan, East London and Hammersmith and City lines. These lines are only just below ground level, having been built in 'cut and cover' tunnels.

Transport for London

The body appointed under the Greater London Authority Act 1999 which has taken over London Transport's responsibilities, apart from London Underground. After the PPP contracts are signed, London Underground Limited will be transferred to Transport for London and will be answerable to the Mayor of London for the service it delivers.