Contract negotiations were completed last month between London Underground (LUL), and Metronet, the preferred bidder for two of LUL’s Public Private Partner-ship (PPP) infrastructure programmes.

Metronet’s shareholders are Atkins, Balfour Beatty, Bombardier, Thames Water and Seeboard, each providing US$112.3M towards the US$4.81bn deal. Metronet will soon be raising US$1.76bn in commercial bank loans, US$962.6M from the European Investment Bank, and US$1.6bn in bonds, which will help finance the investment programme.

Delays on this deal have reportedly cost Atkins US$802,150 a month, contributing to the company’s accounts dropping into the red.

Atkins revealed a US$52.6M half-year loss, compared to a US$23.4M profit last year.

Michael Jeffries, Atkins chairman, blamed, amongst other things, the company’s IT systems.

“We have been adversely impacted by the costs of introducing our new finance systems and back office processes, and by the write off of bid costs,” he said.

“However, the underlying operational performance of the business is sound… we continue to expect that performance in the second half of the year will benefit from cost savings.”

Atkins’ turnover rose 17% to US$720.3M, but debts also increased from US$91.8M to US$168.5M. A profit warning triggered 400 redundancies, and the departure of chief executive Robin Southwell.

A confident Jeffries said: “We are focussed on cost reduction and improving margins, and the Board is optimistic that we can re-establish the Group’s financial performance.”

Metronet, responsible for upgrading, replacing and maintaining seven of London’s underground lines, will be spending nearly US$11.23bn in the first 90 months.

The bank lead arrangers are Abbey National, CIBC, Deutsche Bank and the Royal Bank of Scotland (RBS). The bond lead managers will be Deutsche Bank, USB Warburg and RBS.