Even in developed countries, the central government can foot the bill in case of a default at the local level, without actually having been involved in a PPP. In 2002-2003, Greater London Council launched a project for maintaining and upgrading the London underground. The public sector was uncertain whether Metronet, the consortium responsible for the project's realization, could borrow sufficient funds to cover the investment. Transport for London, a local government body, guaranteed 95% of Metronet's debt obligations to motivate the banks to lend money to Metronet. Eventually, the consortium failed and the partnership broke up. Despite this, the guarantee commenced because it had been provided without specifying any conditions and hence continued regardless of the partnership's failure.
Eventually, the tab was passed to the central Department for Transport, which had to pay £1.7 billion to help Transport for London meet the guarantee (House of Lords 2010). The debt risk was transferred to taxpayers, who incurred a direct loss of between £170 million and £410 million (National Audit Office 2008-2009).