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Plan to sell part of London Underground fleet branded ‘quite mad’

Cash-strapped transport bosses plan to sell part of the London Underground fleet and lease it back to raise money for new tube trains.

The proposal was today described as ‘quite mad’ by a senior member of the London Assembly.

Transport for London hopes the deal will raise £875m to bankroll new trains on the Piccadilly Line in 2023.

TfL finances are being squeezed by a combination of government cuts, the Mayor’s partial fares freeze, and a drop in revenue from advertising and Congestion Charge fines.

The budget has also been hit by fewer passengers using buses because of delays, leading to lower than expected income from fares.

TfL finance boss Simon Kilonback said despite the squeeze, the new Piccadilly Line trains would be ordered in the coming months.

We’ve therefore made a decision about taking some of our existing rolling back and doing a sale and leaseback of that to finance the Piccadilly Line rolling stock.

– SIMON KILONBACK, INTERIM CHIEF FINANCE OFFICER, TRANSPORT FOR LONDON

You’re going to be selling and leasing back rolling stock you’ve already got, that you wholly own, in order to give you the cash to buy new rolling stock? It sounds quite mad.

– CAROLINE PIDGEON, LIBERAL DEMOCRAT, LONDON ASSEMBLY

This rather unusual arrangement has the whiff of a private finance initiative and exposes TfL to unwanted risks. The fact TfL is having to milk cash from its assets in this way paints yet more detail of the worrying state of TfL's finances.

– KEITH PRINCE, CONSERVATIVE, LONDON ASSEMBLY

As is perfectly standard and common practice across the rail industry, we are looking at whether we could sell and lease back some of TfL’s rolling stock, as we have previously done on London Overground. This would allow us to purchase new trains on London Underground’s Piccadilly line, where there is a clear need for a modern fleet.

– TfL SPOKESPERSON