Land Securities is threatening to sue London Underground over the £3m it spent on its bid for the Tubes property portfolio.
The developer spent the money preparing a bid for the London Underground Property Partnership. Under the original LUPP proposals, a portfolio of 50 surplus properties, with a development value of £2bn, would have been transferred to Land Securities or Chelsfield, the final shortlisted bidders. Development profits were due to be shared over 20 years.
The two companies have been negotiating with LU for over two years. A LandSec insider said: “It seems clear that the deal is dead. We have already indicated to LU that we intend to claim back the money we spent on preparing the bid. But until London Underground officially admits LUPP is dead, we cant do anything.”
He said that if LU did not surrender the full £3m compensation the company would instruct its legal adviser, Lovells, to issue a writ. “Its a lot of money, and we are not likely to just throw it away.”
Last week, EG revealed that secretary of state Stephen Byers feels “powerless” to prevent control of the property sell-off going to GLA division Transport for London.
The source added: “Weve received contradictory messages from Transport for London and London Underground about LUPP. TfL and Stephen Byers are saying that the property assets will go to TfL and then be sold off piece-by-piece, but LU still maintains that no decision has been made.”
An LU spokesman said: “The LUPP decision was deferred in September last year. Nothing has been announced yet.”
LU will have to decide the future of the deal when the public-private partnership deals to control the Tube are completed in the next six weeks.
London Undergrounds former finance director Patrick Butcher, who resigned last September, is thought to have left his post due to frustrations with delays to the LUPP deal and the Tubes part privatisation.
The collapse of the LUPP and the transfer of the Tubes property assets to Transport for London could also mean that less profitable sites will not be sold at all.
EGi News 23/02/02
