Thursday, November 26, 2020
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London Transport ‘Will Shut Without Second Bailout’

London Transport ‘Will Shut Without Second Bailout’.
London’s transport network will shut down in a “doomsday scenario” without a second bailout, Transport for London (TfL) has warned. The government agreed to a £1.6bn bailout in May, to keep services running after TfL’s income fell by 90% during the coronavirus pandemic.

The deal is due to expire in two weeks. TfL bosses say the network needs £2bn to run until the end of the year.

The government has promised a letter setting out terms for a fresh bailout.

TfL Commissioner Andy Byford said finances were “right on the wire”.

The transport authority wants almost £3bn to stay afloat through 2021, according to the Local Democracy Report Service. Without government cash, the network will be forced to issue a Section 114 order – the equivalent of bankruptcy for a public company.

This “doomsday scenario” would mean “absolute shut down” with TfL only allowed to run services it has to provide by statute dating back to the 1800s.

Due to a 200-year-old law, the Woolwich Ferry – which links Woolwich and North Woolwich – is the only commuter service TfL is legally obliged to run.

Buses for children who live more than two miles from school would also continue to run.

TfL would also carry out limited road repairs and licence taxis and private hire vehicles. But the Tube, Overground, rail services, trams and most buses would stop running.

Alternate ticket barriers are taped off at Waterloo tube station on the London Underground

Mr Byford said: “London will grind to a halt – it’s as simple as that.”

London’s Deputy Mayor for Transport, Heidi Alexander, said she wanted a “grown-up discussion” with ministers. “We do run the risk of this becoming less of a negotiation and more of an exchange of information that then just results in an imposition from Government of a whole series of conditions,” she warned.

London Mayor Sadiq Khan and his team complained of punitive conditions attached to the first grant at the last minute – including extra borrowing, slashing free travel for older people and under 18s and raising fares next year.

But Conservative group leader Susan Hall said it was right for ministers to put rules in place when TfL was asking for billions of pounds at taxpayers’ expense. Ms Hall said the network should consider dipping into its £1.2bn reserve. “It’s a hefty sum of money and I’ve been told it’s used for rainy days,” she said. “I would suggest it’s pouring at the moment.”

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