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Archive
2001-10-18 TfL-001
London Regional Transport
TfL welcomes AA credit rating, but warns against PPP risk
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Press release
London Regional Transport
TfL welcomes AA credit rating, but warns against PPP risk
Transport for London (TfL) today welcomed the award of an AA rating by credit agency Standard & Poor's. The rating indicates that TfL has a VERY STRONG capacity to meet its financial commitments.
Commenting on the award, TfL Managing Director of Finance and Planning, Jay Walder said: "We are extremely pleased with the very strong credit rating given TfL by Standard & Poor's. The rating reflects the advances made by TfL's experienced senior management team, which recently introduced new systems of financial control and a comprehensive business plan, now going through the final approval process."
However, Standard & Poor's placed a negative outlook on the rating, reflecting the potential for the rating to be lowered. Standard & Poor's specifically noted that a rating downgrade would be warranted if the London Underground PPP contracts allow contractors to pass unforeseen risks to TfL; where the costs of the PPP contracts creates an unexpected high financial burden to TfL; or where TfL assumes unforeseen risks as part of the transfer of other (non PPP) London Underground activities.
TfL Commissioner Bob Kiley said: "We are pleased with the very strong rating, but it comes with a warning.
"If the Government goes ahead with their PPP proposals, the risk inherent in the London Underground PPP can only fall on the travelling public and London's taxpayers.
"Simply transferring London Underground to TfL without the appropriate financial commitments from Government will leave TfL in an untenable financial position. A Government commitment is vital to support continuing operations and the rebuilding of the Underground, together with the existing liabilities TfL will be assuming."
"We hope the Government takes this warning seriously and acts appropriately."
Railnews Archive ::: 2001-10-18 TfL-001
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