Jarvis seeks to cut stake in Tube

CONTROVERSIAL maintenance group Jarvis threw the much-vaunted part-privatisation of the London Underground into disarray today by announcing it is seeking a partial exit from the multi-billion pound flagship public-private partnership project.

Jarvis, which only six weeks ago admitted it is facing a cash crunch after failing to bag a number of private finance initiative projects last year, said it is looking to sell up to half of its 33% stake in Tube Lines, the private-sector consortium running the Jubilee, Northern and Piccadilly lines.

Tube Lines is currently in the middle of a £2bn refinancing of its bank debt, which the London Evening Standard revealed yesterday will see Jarvis and its partners Bechtel and Amey receive a £30m windfall.

Now, Jarvis is seeking to sell half of its stake to raise at least a further £22.5m. Jarvis has so far pumped £45m into Tube Lines in return for a 33% stake. Any sale would seek to recoup half of that plus what a spokesman called 'contingent liabilities' and a premium for the value of the holding, which is reckoned to be potentially worth hundreds of millions of pounds over the life of the contract.

The company, chaired by London mayoral candidate Steve Norris, said: 'This is in line with Jarvis's prudent business strategy of limiting its capital investment in any single project.'