Signal work goes to Metronet partner

TRANSPORT for London has chosen its preferred bidder to overhaul the Tube signalling system, handing work worth an estimated £25m a year to one of the firms involved in the collapsed Metronet operator.

The award came on a day of severe delays on the Underground following a signal failure on the District Line.

Bombardier Transportation had long-term refurbishment contracts worth £3.4bn before Metronet, a venture between five companies, fell into administration in 2008 after an expected £2bn overspend.

Bombadier has seen off competition for the new contract from Invensys, whose shares dropped 2.5 per cent yesterday.

“It may cost Invensys about £25m of revenues a year, which in the grand scheme of things isn’t that much,” said Nomura analyst Michael Hagmann. “The question is whether the firm will be able to make up for it with other contracts.”

Bombardier and TfL said they could not comment on the deal until it is formally signed in a few weeks’ time.