THE PPP Arbiter Chris Bolt is due to publish a key decision about the funding of LUL contractor Tube Lines on Wednesday. His findings will be a major factor in helping to shape the Underground over the next few years (writes the Railnews Metro reporter).

At the heart of the matter is the budget for Tube Lines' next Control Period, which is about to start. TL's bid for £5.7 billion was met with an offer of £4 billion from LUL last year, and the Arbiter has already indicated in a provisional decision that he is minded to increase the amount to £4.4 billion.

But this is still way below the Tube Lines figure, and the situation has been complicated by the fact that a Freedom of Information Act request by Tube Lines revealed that Transport for London is spending £20 million for each kilometre of the Victoria Line upgrade, while Tube Lines is allocating £10 million per km for upgrading the Northern Line. The revelation has sparked a dispute about the relative efficiencies of Transport for London's in-house department Metronet, which is responsible for most of the system, including the Victoria Line. Its sole external contractor Tube Lines is responsible only for the Jubilee, Northern and Piccadilly Lines.

Metronet itself is a relic of the failed PPP contractor of the same name which failed in July 2007, and some commentators have been speculating that a similar crisis may now lie ahead for Tube Lines unless the funding dispute can be resolved.

If the Arbiter rules on Wednesday that the budget is to be £4.4 million, there may be not one but two crises. Tube Lines will be obliged to carry out its contractual obligations with a budget shortfall of £1.3 billion, while London Underground may be forced to make cuts in services, reduce other projects or increase fares to find the additional £400 million it will need.

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