It has been viewed positively by trade unions and London business organisations. It was not only welcomed by the Tories on the London Assembly, but viewed as a positive step by their Labour counterparts.This is because the central issue is not private sector versus public sector, but getting the best management. Bob Kiley is widely acknowledged as the best urban-transport manager in the world. He and the other world-class managers he hopes to attract to London have experience of running mass transit systems, which the current bidders do not.

Bob Kiley has worked with many of the companies that comprise the Infracos – these companies entered the PPP process in good faith and while they are not necessarily qualified to run the system itself, many of them are eminently qualified to bid for the work to modernise the system. They would be able to do so under the Kiley plan.The Government’s decision to stick within Tory spending limits for its first two years, combined with the very real concerns regarding the competence of the London Underground management, created the conditions for the current PPP. Money would be found but the LU management would be kept away from being able to spend it But political conditions have changed. The public’s opposition to fragmenting the national rail system after Paddington and Hatfield is now a major factor. Furthermore, the Government has now abandoned the Tory spending limits and announced a significant expansion of public expenditure. Finally, in recruiting the best possible management available by bringing in Bob Kiley, the man who pulled the New York Subway back from the brink, I have been able to address the objections about the existing London Underground management.A growing consensus that the PPP proposals are flawed is not sufficient to make political progress.

The key factor in ensuring that we now have a serious debate on the Underground’s future was the intervention of John Prescott. Following initial contacts between myself, the transport minister Gus MacDonald, and Bob Kiley, the Commissioner of Transport for London, it was John’s personal intervention that has ensured progress. I met John on a Saturday morning, in his House of Commons office, a month ago, for a private meeting. Last week, John organised two meetings with Bob Kiley lasting nearly four hours in total, in order to have substantive discussions on the PPP.Although there is not yet an agreement on the future funding of the London Underground, there is now, for the first time, a dialogue that allows both politicians and technical experts to examine the complex issues involved. In the face of this progress, it was disappointing to see that one of the few remaining bastions of support for PPP was this newspaper, which argued last week that “the best practical solution for the Tube would be full privatisation”. The Independent’s defence of the PPP was based on the erroneous view that under the Government’s plan, the private sector takes the risk, thus avoiding the cost to the taxpayer of overruns such as the Jubilee Line extension.As the Kiley plan points out, it is not the profit motive that makes firms efficient, but competition. Without competition there is only the incentive to gain the highest profit at the lowest costs – but under PPP there is no competition at all, only 30-year monopolies.

Furthermore, since, in the end, the Tube is a public service, the bidders know that the Government cannot afford to do anything other than to ensure the trains run. The ultimate risk is still held by the public sector.As The Independent on Sunday correctly argued, the key issue is maintaining the ability to manage the whole network: “There is much common ground between the two sides. Mr Prescott and Mr Kiley agree that new managers are needed to run the Underground. They agree that the private sector should play a substantial role. But Mr Kiley’s proposals would not fracture the Tube into several pieces, and would provide clearer accountability.”This key political fact is not only clear to me after studying the tortuous development of the PPP. It is clear to everyone who has seen the consequences of fragmenting the management of the national rail network.