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Schedule 4.1 - Performance Payment Mechanism

1. Calculation of the Infrastructure Service Charge (ISC) for each Period

1.1 Purpose of Paragraph This paragraph 1 sets out the formula to calculate the amount which LUL is obliged to pay to Infraco in any Payment Period notwithstanding that the invoicing amount may be different to the extent that at the date of invoicing there are outstanding figures which are not agreed between the parties and have not been determined by the Dispute Resolution Agreement.

1.2 Calculation of the ISC

1.2.1 Subject to paragraphs 1.2.2 and 1.2.3 below, the Performance Adjusted ISC ( PAISC ) in each Payment Period shall be the Underlying ISC ( ISC UND ) as adjusted by the Capability Adjustment, Availability Adjustment, Ambience Adjustment, Service Points Adjustment and Specific Projects Adjustment.
1.2.2 The PAISC for the first Payment Period in each Contract Year following the first Contract Year shall include a Usage Annual Adjustment for the previous Contract Year.
1.2.3 Indexation shall not be applied to any monetary value or amount used in the calculation of the PAISC, provided that the product of the calculation of the PAISC shall be indexed in accordance with Schedule 4.2 ( Indexation ) as at the last day of the Payment Period to which such PAISC relates.

2. Calculation of the Capability Adjustment

2.1 Purpose of Paragraph

2.1.1 This paragraph 2 sets out the formula used to calculate the amount by which the Underlying ISC is to be adjusted in respect of the Actual Aggregate Capability score achieved by Infraco ( T * ) compared to the Benchmark levels of Aggregate Capability ( T BMK ) in respect of each JNP Line Grouping per Payment Period.
2.1.2 For any Line Grouping, the Actual Aggregate Capability score ( T* ) is the sum of Actual Journey Time Capability ( K* ), Actual Service Consistency ( Y* ) and Actual Service Control ( L* ) as calculated in accordance with paragraphs 1.1.1, 2.1.1 and 3.1.1 of Section Two and Schedule 1 of the Performance Measurement Code.
2.2 Calculation of the Aggregate Capability Adjustment for each Payment Period

The amount of the Aggregate Capability Adjustment for each Payment Period shall be the sum of the Aggregate Capability Adjustment for the Jubilee Line Grouping ( J ), Northern Line Grouping ( N ) and Piccadilly Line Grouping ( P ) as calculated in accordance with the formulae in paragraphs 2.3 to 2.5 below:

2.3 Calculation of the Aggregate Capability Adjustment for the Jubilee Line Grouping for each Payment Period

2.3.1 The Actual Aggregate Capability score for the Jubilee Line Grouping for each Payment Period ( JT * ) shall be calculated in accordance with the following formula:

JT* = JK* + JY* + JL*

where: JT* is the Actual Aggregate Capability score for the Jubilee Line Grouping;

JK* is the Actual Journey Time Capability score for the Jubilee Line Grouping;

JY* is the Actual Service Consistency score for the Jubilee Line Grouping; and

JL* is the Actual Service Control score for the Jubilee Line Grouping.
2.3.2 The amount of the Actual Aggregate Capability Adjustment for the Jubilee Line Grouping for each Payment Period shall be calculated as set out in paragraph 2.3.3 below using the key Capability performance levels set out in Appendix 2 ( Payment Parameters ).

2.3.3 If the Actual Aggregate Capability score for the Jubilee Line Grouping ( JT* ) is:

(a) greater than or equal to the Unacceptable Aggregate Capability score ( JT UNAC ) then the Aggregate Capability Adjustment for the Jubilee Line for each Payment Period shall be:

- jt3 .( JT* - JT UNAC ) - jt2 .( JT UNAC - JT BMK )

(b) less than the Unacceptable Aggregate Capability score but greater than or equal to the Benchmark Aggregate Capability score ( JT BMK ) then the Aggregate Capability Adjustment for the Jubilee Line Grouping for each Payment Period shall be:

- jt2 .( JT* - JT BMK )

(c) less than the Benchmark Aggregate Capability score but greater than or equal to the Cap Aggregate Capability score ( JT CAP ) then the Aggregate Capability Adjustment for the Jubilee Line Grouping for each Payment Period shall be:

+ jt1 .( JT BMK - JT* )

(d) less than the Cap Aggregate Capability score then the Aggregate Capability Adjustment for the Jubilee Line Grouping for each Payment Period shall be:

+ jt1 .( JT BMK - JT CAP ) where:



jt1

being the marginal rate of payment adjustment between Benchmark and Cap levels, is set at £442,308 to 7 th January 2012 and £642,308 thereafter;


jt2

being the marginal rate of payment adjustment between Unacceptable and Benchmark levels, is set at £884,615 to 7 th January 2012 and £1,284,615 thereafter; and


jt3

being the marginal rate of payment adjustment above Unacceptable level, is set at £1,326,923 to 7 th January 2012 and £1,926,923 thereafter.


2.4 Calculation of the Aggregate Capability Adjustment for the Northern Line Grouping for each Payment Period

2.4.1 The Actual Aggregate Capability score for the Northern Line Grouping for each Payment Period ( NT* ) shall be calculated in accordance with the following formula:

NT* = NK* + NY* + NL*

where: NT* is the Actual Aggregate Capability score for the Northern Line Grouping;

NK* is the Actual Journey Time Capability score for the Northern Line Grouping;

NY* is the Actual Service Consistency score for the Northern Line Grouping; and

NL* is the Actual Service Control score for the Northern Line Grouping.
2.4.2 The amount of the Actual Aggregate Capability Adjustment for the Northern Line Grouping, for each Payment Period, shall be calculated as set out in paragraph 2.4.3 below using the key Capability performance levels set out in Appendix 2 ( Payment Parameters ).

2.4.3 If the Actual Aggregate Capability score for the Northern Line Grouping ( NT* ) is:

(a) greater than or equal to the Unacceptable Aggregate Capability score ( NT UNAC ) then the Aggregate Capability Adjustment for the Northern Line Grouping for each Payment Period shall be:

- nt3 .( NT* - NT UNAC ) - nt2 .( NT UNAC - NT BMK )

(b) less than the Unacceptable Aggregate Capability score but greater than or equal to the Benchmark Aggregate Capability score ( NT BMK ) then the Aggregate Capability Adjustment for the Northern Line Grouping for each Payment Period shall be:

- nt2 .( NT* - NT BMK )

(c) less than the Benchmark Aggregate Capability score but greater than or equal to the Cap Aggregate Capability score ( NT CAP ) then the Aggregate Capability Adjustment for the Northern Line Grouping for each Payment Period shall be:

+ nt1 .( NT BMK - NT* )

(d) less than the Cap Aggregate Capability score then the Aggregate Capability Adjustment for the Northern Line Grouping for each Payment Period shall be:

+ nt1 .( NT BMK - NT CAP ) where:



nt1

is £571,154 being the marginal rate of payment adjustment between Benchmark and Cap levels;


nt2

is £1,142,308 being the marginal rate of payment adjustment between Unacceptable and Benchmark levels; and


nt3

is £1,713,462 being the marginal rate of payment adjustment above Unacceptable level.


2.5 Calculation of the Aggregate Capability Adjustment for the Piccadilly Line Grouping for each Payment Period

2.5.1 The Actual Aggregate Capability score for the Piccadilly Line Grouping for each Payment Period ( PT* ) shall be calculated in accordance with the following formula:

PT* = PK* + PY* + PL*

where: PT* is the Actual Aggregate Capability score for the Piccadilly Line Grouping:

PK* is the Actual Journey Time Capability score for the Piccadilly Line Grouping:

PY* is the Actual Service Consistency score for the Piccadilly Line Grouping; and

PL* is the Actual Service Control score for the Piccadilly Line Grouping.
2.5.2 The amount of the Actual Aggregate Capability Adjustment for the Piccadilly Line Grouping for each Payment Period shall be calculated as set out in paragraph 2.5.3 below using the key Capability performance levels set out in Appendix 2 ( Payment Parameters ).

2.5.3 If the Actual Aggregate Capability score for the Piccadilly Line Grouping ( PT* ) is:

(a) greater than or equal to the Unacceptable Aggregate Capability score ( PT UNAC ) then the Aggregate Capability Adjustment for the Piccadilly Line Grouping for each Payment Period shall be:

- pt3 .( PT* - PT UNAC ) - pt2 .( PT UNAC - PT BMK )

(b) less than the Unacceptable Aggregate Capability score but greater than or equal to the Benchmark Aggregate Capability score ( PT BMK ) then the Aggregate Capability Adjustment for the Piccadilly Line Grouping for each Payment Period shall be:

- pt2 .( PT* - PT BMK )

(c) less than the Benchmark Aggregate Capability score but greater than or equal to the Cap Aggregate Capability score ( PT CAP ) then the Aggregate Capability Adjustment for the Piccadilly Line Grouping for each Payment Period shall be:

+ pt1 .( PT BMK - PT* )

(d) less than the Cap Aggregate Capability score then the Aggregate Capability Adjustment for the Piccadilly Line Grouping for each Payment Period shall be:

+ pt1 .( PT BMK - PT CAP ) where:



pt1

is £503,077 being the marginal rate of payment adjustment between Benchmark and Cap levels;


pt2

is £1,006,154 being the marginal rate of payment adjustment between Unacceptable and Benchmark levels; and


pt3

is £1,509,231 being the marginal rate of payment adjustment above Unacceptable level.


3. Calculation of the Availability Adjustment

3.1 Purpose of Paragraph

3.1.1 This paragraph 3 sets out the formula to calculate the amount that the Underlying ISC is to be adjusted in respect of the Actual Availability score achieved by Infraco ( H * ) compared to the Benchmark levels of Availability ( H BMK ) in respect of each JNP Line per Payment Period.
3.1.2 The Actual Availability score for each JNP Line is calculated in accordance with paragraph 4 of Section Two of the Performance Measurement Code.
3.1A The total Availability Adjustment for the Infraco is equal to:

HI + HO

where:

HI is the amount of Availability Adjustment for the Jubilee, Northern and Piccadilly Lines; and

HO is the amount of Availability Adjustment for another Infraco's Line.
3.2 Calculation of the Availability Adjustment for each Payment Period for Service Disruption on Infraco Lines (HI)

The amount of the Availability Adjustment for each Payment Period for Service Disruption on Infraco Lines shall be the sum of the Availability Adjustment for the Jubilee Line ( J ), Northern Line ( N ) and Piccadilly Line ( P ) as calculated in accordance with the formulae in paragraphs 3.3 to 3.6 below.

3.3 Calculation of the Availability Adjustment for the Jubilee Line for each Payment Period

3.3.1 Subject to paragraph 3.6 below, the amount of the Actual Availability Adjustment for the Jubilee Line for each Payment Period shall be calculated as set out in paragraph 3.3.2 below using the key Availability performance levels set out in Appendix 2 ( Payment Parameters ).

3.3.2 If the Actual Availability score for the Jubilee Line ( JH* ) is:

(a) greater than or equal to the Unacceptable Availability score ( JH UNAC ) then the Availability Adjustment for the Jubilee Line for each Payment Period shall be:

- h3 .( JH* - JH UNAC ) - h2 .( JH UNAC - JH BMK )

(b) less than the Unacceptable Availability score but greater than or equal to the Benchmark Availability score ( JH BMK ) then the Availability Adjustment for the Jubilee Line shall be:

- h2 .( JH* - JH BMK )

(c) less than the Benchmark Availability score but greater than or equal to the Cap Availability score ( JH CAP ) then the Availability Adjustment for the Jubilee Line shall be:

+ h1 .( JH BMK - JH* )

(d) less than the Cap Availability score then the Availability Adjustment for the Jubilee Line shall be:

+ h1 .( JH BMK - JH CAP ) where:



h1

is £3.00 per hour being the marginal rate of payment adjustment between Benchmark and Cap levels;


h2

is £6.00 per hour being the marginal rate of payment adjustment between Unacceptable and Benchmark levels; and


h3

is £9.00 per hour being the marginal rate of payment adjustment above Unacceptable level.


3.4 Calculation of the Availability Adjustment for the Northern Line for each Payment Period

3.4.1 Subject to paragraph 3.6 below, the amount of the Actual Availability Adjustment for the Northern Line for each Payment Period shall be calculated as set out in paragraphs 3.4.2 below using the key Availability performance levels set out in Appendix 2 ( Payment Parameters ).

3.4.2 If the Actual Availability score for the Northern Line ( NH* ) is:

(a) greater than or equal to the Unacceptable Availability score ( NH UNAC ) then the Availability Adjustment for the Northern Line for each Payment Period shall be:

- h3 .( NH* - NH UNAC ) - h2 .( NH UNAC - NH BMK )

(b) less than the Unacceptable Availability score but greater than or equal to the Benchmark Availability score ( NH BMK ) then the Availability Adjustment for the Northern Line shall be:

- h2 .( NH* - NH BMK )

(c) less than the Benchmark Availability score but greater than or equal to the Cap Availability score ( NH CAP ) then the Availability Adjustment for the Northern Line shall be:

+ h1 .( NH BMK - NH* )

(d) less than the Cap Availability score then the Availability Adjustment for the Northern Lines shall be:

+ h1 .( NH BMK - NH CAP ) where:



h1

is £3.00 per hour being the marginal rate of payment adjustment between Benchmark and Cap levels;


h2

is £6.00 per hour being the marginal rate of payment adjustment between Unacceptable and Benchmark levels; and


h3

is £9.00 per hour being the marginal rate of payment adjustment above Unacceptable level.


3.5 Calculation of the Availability Adjustment for the Piccadilly Line for each Payment Period

3.5.1 Subject to paragraph 3.6 below, the amount of the Actual Availability Adjustment for the Piccadilly Line for each Payment Period shall be calculated as set out in paragraph 3.5.2 below using the key Availability performance levels set out in Appendix 2 ( Payment Parameters ).

3.5.2 If the Actual Availability score for the Piccadilly Line ( PH* ) is:

(a) greater than or equal to the Unacceptable Availability score ( PH UNAC ) then the Availability Adjustment for the Piccadilly Line for each Payment Period shall be:

- h3 .( PH* - PH UNAC ) - h2 .( PH UNAC - PH BMK )

(b) less than the Unacceptable Availability score but greater than or equal to the Benchmark Availability score ( PH BMK ) then the Availability Adjustment for the Piccadilly Line shall be:

- h2 .( PH* - PH BMK )

(c) less than the Benchmark Availability score but greater than or equal to the Cap Availability score ( PH CAP ) then the Availability Adjustment for the Piccadilly Line shall be:

+ h1 .( PH BMK - PH* )

(d) less than the Cap Availability score then the Availability Adjustment for the Piccadilly Line shall be:

+ h1 .( PH BMK - PH CAP ) where:



h1

is £3.00 per hour being the marginal rate of payment adjustment between Benchmark and Cap levels;


h2

is £6.00 per hour being the marginal rate of payment adjustment between Unacceptable and Benchmark levels; and


h3

is £9.00 per hour being the marginal rate of payment adjustment above Unacceptable level.


3.6 Availability Adjustment for a Disruption Event

3.6.1 In the event that a Disruption Event occurs, the amount of the Availability Adjustment for each Payment Period in respect of any JNP Line so affected will be calculated in accordance with paragraphs 3.6.2 to 3.6.4 below.

Low Service Disruption

3.6.2 In relation to any JNP Line on which a Disruption Event occurs, the calculation of the Actual Availability under paragraph 4.2 of Section Two of the Performance Measurement Code shall cease to apply in respect of those days during which Low Service Disruption continues. In such circumstances, the amount of the Availability score used to determine Actual Availability shall be calculated by reference to the Availability score resulting from Incidents for that JNP Line Closed-out on each of the other days in that Payment Period during which the Low Service Disruption was not continuing and the remaining unaffected JNP Lines ( if any ) shall be calculated in accordance with paragraph 4 of Section Two of the Performance Measurement Code.

Medium Service Disruption

3.6.3 In relation to any JNP Line on which a Disruption Event occurs, the calculation of the Actual Availability under paragraph 4.2 of Section Two of the Performance Measurement Code shall cease to apply in respect of any Payment Period during which a Medium Service Disruption occurs. In such circumstances, the amount of the Availability score used to determine Actual Availability shall be calculated by reference to the Availability Score resulting from Incidents for that JNP Line Closed-out over the six (6) Payment Periods immediately prior to the Payment Period during which the Medium Service Disruption occurs and the remaining unaffected JNP Lines ( if any ) shall be calculated in accordance with paragraph 4 of Section Two of the Performance Measurement Code.

High Service Disruption

3.6.4 In relation to any JNP Line on which a Disruption Event occurs, the calculation of the Actual Availability under paragraph 4.2 of Section Two of the Performance Measurement Code shall cease to apply in respect of any Payment Period during which High Service Disruption continues. In such circumstances, the amount of the Availability score used to determine Actual Availability shall be calculated by reference to the average performance by Infraco resulting from Incidents for that JNP Line Closed-out over the six (6) Payment Periods immediately prior to the Payment Period during which the High Service Disruption occurs and the remaining unaffected JNP Lines ( if any ) shall be calculated in accordance with paragraph 4 of Section Two of the Performance Measurement Code and there shall be deducted from the Availability Adjustment for the relevant Payment Period, the amount equal to any cost savings enjoyed by Infraco ( taking account of Infraco's duty to mitigate ) achieved during the duration of the Disruption Event.

3.7 Calculation of the Availability Adjustment for each Payment Period for Service Disruption on another Infraco's Line (H0)

3.7.1 In the event that Incidents Closed-out in a Payment Period are attributable to Infraco, but resulted in Service Disruption on BCV or SSL, the Availability Adjustment for that Payment Period calculated in accordance with paragraphs 3.3 to 3.5 above shall be adjusted such that all Lost Customer Hours in the relevant Payment Period and not the three period rolling average and if a Speed Restriction not the six period rolling average, deemed to result from Disruptions caused by such Incidents are applied as adjustments to the ISC at a rate of h2 as set out in paragraph 3.6.2 above.

3.8 Engineering Over-Runs

3.8.1 Where Train or Station Facilities, excluding Lifts, escalators, or Customer conveyors, are not Available as a result of an Engineering Over-Run, the provisions of Schedule 8,

Part C of the Performance Measurement Code will apply. For the avoidance of doubt, these provisions will be applied in addition to Availability Adjustments for Service Disruptions resulting from Engineering Over-Runs.

4. Calculation of the Ambience Adjustment

4.1 Purpose of Paragraph

This paragraph 4 sets out the formula to calculate the aggregate amount that the Underlying ISC is to be adjusted per Payment Period in respect of the actual performance levels achieved by Infraco for all JNP Lines under the Mystery Shopping Scoring Criteria as set out in Schedule 6 ( Mystery Shopping Scoring Criteria ) and the audit procedures as set out in Schedule 7 ( Audit Criteria and Procedures ) and paragraph 5 of Section Two of the Performance Measurement Code ( A* ) as compared to the Benchmark Ambience performance levels ( A BMK ) which are combined into an aggregate measure by weighting the scores for each JNP Line.

4.2 Calculation of the Ambience Adjustment

4.2.1 The amount of the Ambience Adjustment shall be calculated in accordance with paragraph 4.2.2 below using the key performance levels set out in Appendix 2 ( Payment Parameters ):

4.2.2 If the actual Ambience score ( A* ) is:

(a) less than or equal to Unacceptable Ambience score ( A UNAC ) then the Ambience Adjustment for each Payment Period shall be:

- a3 .( A UNAC - A* ) - a2 .( A BMK - A UNAC )

(b) greater than Unacceptable Ambience score but less than or equal to the Benchmark Ambience score ( A BMK ) then the Ambience Adjustment for each Payment Period shall be:

- a2 .( A BMK - A* )

(c) greater than the Benchmark Ambience score but less than or equal to the Cap Ambience Adjustment ( A CAP ) then the Ambience Adjustment for each Payment Period shall be:

+ a1 .( A* - A BMK )

(d) greater than the Cap Ambience Adjustment then the Ambience Adjustment for each Payment Period shall be:

+ a1 .( A CAP - A BMK ) where:



a1

is £58,240 being the marginal rate of payment adjustment between Benchmark and Cap levels;


a2

is £112,000 being the marginal rate of payment adjustment between Unacceptable and Benchmark levels; and


a3

is £168,000 being the marginal rate of payment adjustment below Unacceptable level.


5. Calculation of the Service Points Adjustment

5.1 Purpose of Paragraph This paragraph 5 sets out the formula to calculate the amount that the Underlying ISC is to be adjusted per Payment Period in respect of the levels of Service Points accumulated ( the Service Points Adjustment ), in accordance with paragraph 6 of Section Two and Schedule 8 of the Performance Measurement Code ( Service Points ).

5.2 Calculation of the Service Points Adjustment

5.2.1 The amount of the Service Points Adjustment for each Payment Period shall be calculated in accordance with the following formula:

- (S*).s or zero, whichever is the lesser. where:





S*

is the actual number of Service Points allocated in the Payment Period; and


s

is £50 being the rate per Service Point deducted from the ISC.

6. Calculation of the Specific Projects Adjustment

6.1 Purpose of Paragraph

6.1.1 This paragraph 6 sets out the formula to calculate the amount that the Underlying ISC is to be adjusted in respect of the number of Specific Projects completed at the end of the Payment Period in accordance with the details set out in Appendix 3 ( Specific Projects ).
6.1.2 The Specific Projects Adjustment covers Specific Projects as set out in Schedule 2.1 of the PPP Contracts, where Delivery into Service of such new or enhanced Facilities as are necessary to meet such Specific Projects are not financially rewarded, or not sufficiently financially rewarded under the time based measures in paragraphs 2 and 3 or Ambience in paragraph 4 above.

6.2 Increase in Underlying ISC for Specified Line Upgrades

6.2.1 Subject to paragraph 6.2.2 below, from and after the Payment Period following the Payment Period during which a Specified Line Upgrade is Delivered into Service, the Underlying ISC shall be increased by the amount set out in column 3 of Table 1 of Appendix 3 ( Specified Line Upgrades ) Provided that if a Specified Line Upgrade is Delivered into Service prior to the Earliest Implementation Date, the Underlying ISC shall only be increased from the Payment Period following the Payment Period in which the Earliest Implementation Date falls.
6.2.2 Where Infraco Delivers into Service a proportion of the Specified Line Upgrade by the Latest Implementation Date set out in column 5 of Table 1 of Appendix 3 ( Specified Line Upgrades ), from and after the Payment Period following the Payment Period during which such proportion of the Specified Line Upgrade is Delivered into Service, the Underlying ISC shall be increased by the corresponding proportion of the amount set out in column 3 of Table 1 of Appendix 3 ( Specified Line Upgrades ). In this paragraph, "proportion" means, in respect of any Specified Line Upgrade, that percentage which is equal to the following:

= Mathematical formula

where: a = the amount of the Journey Time Capability figure in paragraph 1.1.1 of Schedule 2.1 of the PPP Contract as updated from time to time;

b = the amount of the Journey Time Capability target score set out in column 2 of Table 1 of Appendix 3 to this Schedule; and

c = the amount of the Journey Time Capability figure determined in accordance with the testing procedures set out in Schedule 2 of the Performance Measurement Code.





6.3 Calculation of the Specific Projects Adjustment

6.3.1 Subject to paragraphs 6.3.4 and 6.3.5 below, to the extent that any Specific Project has not been Delivered into Service by the Latest Completion Date or the Latest Implementation Date as the case may be, then from the Payment Period following the Payment Period in which the Latest Completion Date or the Latest Implementation Date falls until such time as the Specific Project is Delivered into Service, the Underlying ISC for each Payment Period shall be adjusted by the amount as calculated in accordance with paragraph 6.3.2 below ( the Specific Projects Adjustment ) provided that in the event that a Delay Event occurs which affects the implementation of a Specific Project, and LUL has given Infraco written notice of the postponement of the relevant Latest Completion Date for such Specific Project to the revised Latest Completion Date set out in the relevant notice in accordance with Clause 20.5 of the Service Contract, ( Revised Latest Completion Date ) and Infraco have fulfilled all obligations in accordance with Clause 20.3 of the Service Contract ( Mitigation ), no abatement shall be applied to the Underlying ISC for late delivery of that Specific Project.
6.3.2 The amount of the Specific Projects Adjustment for each Payment Period shall be the sum of: (a) the deductions for any outstanding Specified Line Upgrades as calculated in accordance with the formula set out in paragraph 6.3.3 below; and

(b) the deductions as set out in column 4 of tables 2 to 5 of Appendix 3 ( Specific Projects ) for any outstanding Specific Projects ( excluding Specified Line Upgrades )

due to be completed during the Payment Period for which payment is being calculated, not completed at that time.

6.3.2A Notwithstanding paragraphs 6.3.2 above, where the Latest Completion Date for a Train Refurbishment for any Line, as specified in Table 2 of Appendix 3, is the same as the Latest Implementation Date for a Specified Line Upgrade for the same Line, as specified in Table 1 of Appendix 3, the amount of Specific Projects Adjustment for each Payment Period shall be that amount determined in accordance with paragraph 6.3.2(a) above and shall not include deductions as determined in accordance with paragraph 6.3.2(b) above.

6.3.3 The deductions for outstanding Specified Line Upgrades shall be calculated in accordance with the following formula:

(a) for the Jubilee Line Grouping the deduction for outstanding Specified Line Upgrades shall be:

- ( JK*-JK TAR ). jk or zero, whichever is the lesser;

(b) for the Northern Line Grouping the deduction for outstanding Specified Line Upgrades shall be:

- ( NK*-NK TAR ). nk or zero, whichever is the lesser; and

(c) for the Piccadilly Line Grouping the deduction for outstanding Specified Line Upgrades shall be:

- ( PK*-PK TAR ). pk or zero, whichever is the lesser;

where: JK* is the Actual Journey Time Capability score for the Jubilee Line Grouping;

NK* is the Actual Journey Time Capability score for the Northern Line Grouping;

PK* is the Actual Journey Time Capability score for the Piccadilly Line Grouping;

JK TAR is the current value for the target Journey Time Capability score for the Jubilee Line Grouping as set out in Table 1 of Appendix 3;

NK TAR is the current value for the target Journey Time Capability score for the Northern Line Grouping as set out in Table 1 of Appendix 3;

PK TAR is the current value for the target Journey Time Capability score for the Piccadilly Line Grouping as set out in Table 1 of Appendix 3;





jk

is £442,308 per Passenger-Minute per Payment Period prior to and including 6 th January 2012 and £642,308 per Passenger-Minute per Payment Period from 7 th January 2012;


nk

is £571,154 per Passenger-Minute per Payment Period; and


pk

is £503,077 per Passenger-Minute per Payment Period.
6.3.4 Where, pursuant to paragraph 2.2 of Appendix 8 of Schedule 2.1 of the PPP Contract, it has been agreed that certain Train Refurbishment work shall not be carried out, or changes shall be made to the Train Refurbishment work or the timing of completion of such work, Table 2 of Appendix 3 of this Schedule shall be amended accordingly.
6.3.5 Where, pursuant to paragraph 1.6 of Appendix 15 of Schedule 2.1 of the PPP Contract, it has been agreed that certain Station Modernisation, Enhanced Station Refurbishment and Station Refurbishment work shall not be carried out, or changes shall be made to the Station Modernisation, Enhanced Station Refurbishment and Station Refurbishment work or the timing of completion of such work, Table 4 of Appendix 3 of this Schedule shall be amended accordingly.
6.4 Where any Snagging Items remain outstanding after the period referred to in paragraph 1.4 of Appendix 9 to Schedule 2.1, the Underlying ISC for each Payment Period shall be adjusted by the amount set out in the fifth column ( Snagging Item deduction per Payment Period ) of Tables 2 to 5 of Appendix 3 to this Schedule.

7. Calculation of the Usage Annual Adjustment

7.1 Purpose of Paragraph

At the end of each Contract Year the number of loaded scheduled train-kilometres in respect of that Contract Year shall be identified from the Working Timetables ( U* ). This paragraph 7 sets out the adjustment to the Underlying ISC made in respect of this level of usage for that Contract Year compared with that projected in Appendix 1 ( Underlying ISC and Aggregated Usage Projections ) ( or as subsequently varied at Periodic Review ).

7.2 Calculation of the Usage Annual Adjustment

7.2.1 The amount of the Usage Annual Adjustment shall be calculated in accordance with the following formula:

(a) If -0.05 ≤ ( U* - U )/U ≤ 0.05 then the Usage Annual Adjustment shall be zero;

(b) If -0.05 > ( U* - U )/U then the Usage Annual Adjustment shall be:

£( U* - 0.95U ).u;

(c) If 0.05 < ( U* - U )/U then the Usage Annual Adjustment shall be:

£( U* - 1.05U ).u
where:



U*

is the number of loaded train-kilometres actually scheduled to be run by LUL on the Infraco Network over the Contract Year;


U

is the number of loaded train-kilometres originally projected to be scheduled to be run on the Infraco Network in the Contract Year as set out in Appendix 1 ( Underlying ISC and Aggregated Usage Projections ) ; and


u

is £0.90 being the marginal rate per loaded train-kilometre scheduled to be run added or deducted from the Underlying ISC.


APPENDIX 1 - Underlying ISC and Aggregated Usage Projections

1.1 In this PPP Contract, the following expressions shall have the following meaning:

Baseline ISC means in respect of any Payment Period, an amount equal to the Underlying ISC for such Payment Period after applying indexation as at the last day of such Payment Period in accordance with paragraph 1.2.3 of this Schedule 4.1 ( Performance Payment Mechanism ) of the PPP Contract; and

Underlying ISC means, per Payment Period: (a) where a Payment Period falls wholly within one of the semi-annual periods set out in paragraph 1.2, Appendix 1 ( Underlying ISC and Aggregated Usage Projections ) of Schedule 4.1 of the PPP Contract, the figure in column 4 applicable to that semi-annual period divided by the number of days within that semi-annual period and multiplied by the number of days in the Payment Period; and

(b) where a Payment Period straddles two semi-annual periods set out in Appendix 1 ( Underlying ISC and Aggregated Usage Projections ) of Schedule 4.1 of the PPP Contract ( the two periods being referred to below as the First Period and the Second Period ), the sum of: (i) in relation to the First Period, the figure in column 4 applicable to that period divided by the number of days in that First Period then multiplied by the number of days in the Payment Period which fall within that First Period; and

(ii) in relation to the Second Period, the figure in column 4 applicable to that period divided by the number of days in that Second Period then multiplied by the number of days in the Payment Period which fall within that Second Figure,

as that amount may be adjusted or amended pursuant to the terms of the Transaction Documents including, without limitation, in respect of the amounts agreed under the Major Enhancement Agreement and increases to be made to such amount when Infraco Delivers into Service the Specified Line Upgrades.

1.2 With effect from the Transfer Date, the Underlying ISC shall be as set out in the table below:



Period

Period Starting

Period Ending

Underlying ISC ( real )


1

31-Dec-02

31-Mar-03

£98,622,525


2

01-Apr-03

30-Sep-03

£197,245,051


3

01-Oct-03

31-Mar-04

£197,245,051


4

01-Apr-04

30-Sep-04

£197,245,051


5

01-Oct-04

31-Mar-05

£197,245,051


6

01-Apr-05

30-Sep-05

£197,245,051


7

01-Oct-05

31-Mar-06

£197,245,051


8

01-Apr-06

30-Sep-06

£249,928,366


9

01-Oct-06

31-Mar-07

£249,928,366


10

01-Apr-07

30-Sep-07

£249,928,366


11

01-Oct-07

31-Mar-08

£249,928,366


12

01-Apr-08

30-Sep-08

£249,928,366


13

01-Oct-08

31-Mar-09

£249,928,366


14

01-Apr-09

30-Sep-09

£249,928,366


15

01-Oct-09

31-Mar-10

£249,928,366


16*

01-Apr-10

30-Sep-10

£273,223,940


17

01-Oct-10

31-Mar-11

£280,520,000


18

01-Apr-11

30-Sep-11

£285,420,000


19

01-Oct-11

31-Mar-12

£285,420,000


20

01-Apr-12

30-Sep-12

£262,420,000


21

01-Oct-12

31-Mar-13

£261,420,000


22

01-Apr-13

30-Sep-13

£257,420,000


23

01-Oct-13

31-Mar-14

£256,420,000


24

01-Apr-14

30-Sep-14

£231,420,000


25

01-Oct-14

31-Mar-15

£226,420,000


26

01-Apr-15

30-Sep-15

£226,420,000


27

01-Oct-15

31-Mar-16

£202,420,000


28

01-Apr-16

30-Sep-16

£202,420,000


29

01-Oct-16

31-Mar-17

£201,420,000


30

01-Apr-17

30-Sep-17

£201,420,000


31		 01-Oct-17

31-Mar-18

£195,420,000


32

01-Apr-18

30-Sep-18

£195,420,000


33

01-Oct-18

31-Mar-19

£191,420,000


34

01-Apr-19

30-Sep-19

£191,420,000


35

01-Oct-19

31-Mar-20

£187,420,000


36

01-Apr-20

30-Sep-20

£187,420,000


37

01-Oct-20

31-Mar-21

£148,020,000


38

01-Apr-21

30-Sep-21

£148,020,000


39

01-Oct-21

31-Mar-22

£150,020,000


40

01-Apr-22

30-Sep-22

£148,020,000


41

01-Oct-22

31-Mar-23

£150,020,000


42

01-Apr-23

30-Sep-23

£148,020,000


43

01-Oct-23

31-Mar-24

£148,020,000


44

01-Apr-24

30-Sep-24

£144,020,000


45

01-Oct-24

31-Mar-25

£144,020,000


46

01-Apr-25

30-Sep-25

£138,020,000


47

01-Oct-25

31-Mar-26

£134,020,000


48

01-Apr-26

30-Sep-26

£134,020,000


49

01-Oct-26

31-Mar-27

£130,020,000


50

01-Apr-27

30-Sep-27

£130,020,000


51

01-Oct-27

31-Mar-28

£80,020,000


52

01-Apr-28

30-Sep-28

£80,020,000


53

01-Oct-28

31-Mar-29

£77,020,000


54

01-Apr-29

30-Sep-29

£77,020,000


55

01-Oct-29

31-Mar-30

£74,020,000


56

01-Apr-30

30-Sep-30

£74,020,000


57

01-Oct-30

31-Mar-31

£74,020,000


58

01-Apr-31

30-Sep-31

£74,020,000


59

01-Oct-31

31-Mar-32

£74,020,000


60

01-Apr-32

30-Sep-32

£74,020,000
61 01-Oct-32 30-Dec-32 £72,085,000


Totals





£10,905,808,696



Please note that the ISC in period 16 is to be apportioned as follows:
From: To: Amount:
01-Apr-10 30-Jun-10 £122,892,953
01-Jul-10 30-Sep-10 £150,330,986

The above table contains information extracted from the financial model dated 7th May 2004, as audited by the pricing model auditors.

2

The table below sets out the Aggregated Usage Projection per Contract Year:


Contract Year

Aggregated Usage Projection
 ( millions of loaded scheduled Train - kilometres )


2002/03

7.55 (1)


2003/04

33.33


2004/05

33.34


2005/06

35.80


2006/07

35.80


2007/08

40.18


2008/09

40.28


2009/10

40.28


2010/11

40.28


2011/12

40.28


2012/13

40.94


2013/14

41.82


2014/15

42.04


2015/16

42.04


2016/17

42.04


Thereafter

42.04
Notes:

(1) Post Transfer Date Aggregate Usage Projection
( 23.08% of Full Contract Year Aggregated Usage Projection of 32.73km )

APPENDIX 2 - Payment Parameters

1. Resetting of Capability Benchmarks at Transfer Date

1.1 The Capability scores, set out in the tables in paragraphs 1.1.1 to 1.1.3 of Schedule 2.1, in Appendix 5 of Schedule 2.1, in Appendix 2 of Schedule 4.1 and in Table 1 of Appendix 3 of Schedule 4.1 shall be updated to reflect the Capability at Transfer Date in accordance with this paragraph 1. Such updates to the calculated Capability scores shall be limited to: 1.1.1 the application of adjustments for Speed Restrictions on the Transfer Date in accordance with paragraph 1.4 of Part A of Schedule 2 of the Performance Measurement Code;

1.1.2 on the Northern Line only, the inclusion of a time allowance for audible warning chimes to be sounded before door closure affecting Infraco measures IRI( ixy ) and RORIT(xd), in compliance with the Category 1 Standard for this requirement or as amended by any concession granted in accordance with the Standards Code.
1.2 Where a Speed Restriction is in place on the Transfer Date ( the Original Speed Restriction ) and the elapsed time between the imposition of the Original Speed Restriction and Transfer Date is less than three (3) complete Payment Periods, the Original Speed Restriction shall be lifted and immediately re-opened as a new Speed Restriction on the Transfer Date and there shall be no corresponding update to the calculated Capability scores in respect of the Original Speed Restriction.
1.3 No changes to Journey Time Capability Infraco Measures, as measured in accordance with the Performance Measurement Code, shall be made unless such changes have been agreed by both parties.
1.4 In the event that any Speed Restriction is identified after the Transfer Date, which was in place prior to the Transfer Date, such Speed Restriction shall be dealt with in accordance with paragraph 1.1 and 1.2 as if it had been identified prior to the Transfer Date and the Capability scores referred to in paragraph 1.1 and 1.2 above shall be updated accordingly.
2. Infraco to be kept financially whole

Where changes are made to the Capability scores in accordance with paragraph 1 above and the changes affect the Capability Adjustment that would result as a consequence of the achievement of a Specified Line Upgrade, as calculated in accordance with paragraph 2 and 6 of Schedule 4.1, a corresponding Specific Project Adjustment for the Specified Line Upgrade shall be agreed by both parties. This will be inserted into column 3 "Increase in Underlying ISC" of Table 1 of Appendix 3 of Schedule 4.1. The value of the Specific Project Adjustment shall be calculated such that the sum of the Capability Adjustments following the achievement of the Specified Line Upgrade and the Specific Project Adjustment shall be equal to the Capability Adjustments which would have resulted had the Capability scores not been amended in accordance with paragraph 1 above.

3. Capability, Availability and Ambience Levels

JNP Capability and Ambience Benchmark Table The table below sets out the values of the key performance levels ( "kink-points" ) in respect of each JNP Line or Line Grouping.


Line or Line Grouping

Capability, Availability and Ambience Levels

Abbreviation

Performance Level


Jubilee Line Grouping

Aggregate Capability - Cap

Until 6 th January 2012

JT CAP

14.99 mins


Jubilee Line Grouping

Aggregate Capability - Benchmark

Until 6 th January 2012

JT BMK

20.89 mins


Jubilee Line Grouping

Aggregate Capability - Unacceptable

Until 6 th January 2012

JT UNAC

25.07 mins


Jubilee Line Grouping

Aggregate Capability - Cap

From 7 th January 2012

JT CAP

15.63 mins


Jubilee Line Grouping

Aggregate Capability - Benchmark

From 7 th January 2012

JT BMK

22.68 mins


Jubilee Line Grouping

Aggregate Capability - Unacceptable

From 7 th January 2012

JT UNAC

27.22 mins


Northern Line Grouping

Aggregate Capability - Cap

NT CAP

16.41 mins


Northern Line Grouping

Aggregate Capability - Benchmark

NT BMK

22.06 mins


Northern Line Grouping

Aggregate Capability - Unacceptable

NT UNAC

26.47 mins


Piccadilly Line Grouping

Aggregate Capability - Cap

PT CAP

19.74 mins


Piccadilly Line Grouping

Aggregate Capability - Benchmark

PT BMK

26.50 mins


Piccadilly Line Grouping

Aggregate Capability - Unacceptable

PT UNAC

31.80 mins


All JNP Lines

Ambience - Cap

A CAP

82 MSS score


All JNP Lines

Ambience - Benchmark

A BMK

71 MSS score


All JNP Lines

Ambience - Unacceptable

A UNAC

64 MSS score
Jubilee Line Availability Benchmark table





Jubilee Line


LUL Accounting Periods

Availability -

Cap ( hours )

JH CAP

Availability -

Benchmark ( hours )

JH BMK

Availability -

Unacceptable ( hours )

JH UNAC


Payment Period 11 2002/3

0

78,867

112,700
Payment Period 12 2002/3 0 78,867 112,700
Payment Period 13 2002/3 0 78,867 112,700
Payment Period 1 2003/4 0 75,319 107,600
Payment Period 2 2003/4 0 75,319 107,600
Payment Period 3 2003/4 0 75,319 107,600
From Payment Period 4 2003/4 to Payment Period 6 2003/4 0 75,300 107,600
Payment Period 7 2003/04 0 76,885 109,865
From Payment Period 8 2003/4 to Payment Period 10 2003/4 0 78,470 112,130


From Payment Period 11 2003/4 to Payment Period 1 2004/5

0

78,170

111,630
From Payment Period 2 2004/05 to Payment Period 10 2004/05 0 88,260 121,720


From Payment Period 11 2004/5 to Payment Period 10 2005/6

0

88,160

121,620


From Payment Period 11 2005/6 to Payment Period 4 2006/7

0

97,268

126,958
Payment Period 5 2006/07 0 97,286 126,976
From Payment Period 6 2006/07 to Payment Period 10 2006/07 0 87,178 116,868


From Payment Period 11 2006/7 to Payment Period 10 2007/8

0

87,178

116,868


From Payment Period 11 2007/8

0

87,078

116,768
Jubilee Line

Not Withstanding the table above, from the earliest of either the Implementation date for the Jubilee Line Specified Upgrade ( as set out in Appendix 5A of Schedule 2.1 of the PPP Contract ), or the 14 th November 2009

Availability - Cap ( hours ) JH CAP Availability - Benchmark ( hours ) JH BMK Availability - Unacceptable ( hours ) JH UNAC
0 74,700 106,700
Northern Line Availability Benchmark table





Northern Line


LUL Accounting Periods

Availability -

Cap ( hours )

NH CAP

Availability -

Benchmark ( hours )

NH BMK

Availability -

Unacceptable ( hours )

NH UNAC


Payment Period 11 2002/3



0

112,929

161,300
Payment Period 12 2002/3 0 112,929 161,300
Payment Period 13 2002/3 0 112,929 161,300
Payment Period 1 2003/4 0 108,419 154,900
Payment Period 2 2003/4 0 108,419 154,900
Payment Period 3 2003/4 0 108,419 154,900
From Start of Payment Period 4 2003/4 0 108,100 154,200


From start of Payment Period 11 2003/4

0

104,300

149,000


From start of Payment Period 11 2004/5

0

101,400

144,800


From start of Payment Period 11 2005/6

0

97,800

139,700


From start of Payment Period 11 2006/7

0

96,800

138,200


From start of Payment Period 11 2007/8

0

96,200

137,400


From start of Payment Period 11 2008/9

0

95,900

137,000
Piccadilly Line Availability Benchmark table





Piccadilly Line


LUL Accounting Periods
Availability -

Cap ( hours )

PH CAP

Availability -

Benchmark ( hours )

PH BMK

Availability -

Unacceptable ( hours )

PH UNAC


Payment Period 11 2002/3

0

183,000

261,400
Payment Period 12 2002/30 183,000 261,400
Payment Period 13 2002/3 0 183,000 261,400
Payment Period 1 2003/4 0 175,333 250,500
Payment Period 2 2003/4 0 175,333 250,500
Payment Period 3 2003/4 0 175,333 250,500
From Payment Period 4 2003/4 to Payment Period 10 2003/4 0 175,000 250,100
Payment Period 11 2003/40 202,000 245,800
From Payment Period 12 2003/4 to Period 10 2004/5 0 227,750 245,800
From Payment Period 11 2004/5 to Period 1 2005/60 224,050 240,500
From Payment Period 2 2005/6 to Period 10 2005/60 168,300 240,500
From Payment Period 11 2005/6 to Payment Period 10 2006/70 166,400 237,900
From Payment Period 11 2006/7 to Payment Period 10 2007/80 164,900 235,700
From Payment Period 11 2007/8 to Payment Period 10 2008/90 163,600 233,900
From start of payment period 11 2008/9 to payment period 12 2008/9 0 162,300 231,900
From start of Payment Period 13 2008/90 168,692 241,031

APPENDIX 3 - Specific Projects

This Appendix 3 sets out the Specific Projects which Infraco is required to Deliver into Service in accordance with Schedule 2.1 of the PPP Contract for each JNP Line. An Earliest Implementation Date and a Latest Implementation Date are shown in Table 1 for each Specified Line Upgrade. A Latest Completion Date for each Specific Project ( excluding Specified Line Upgrades ), and potential deductions for late Delivery into Service of each such project in each Payment Period following the Latest Completion Date, and for late completion of all Snagging Items, are also shown.

Table 1 - Specified Line Upgrades



Line Grouping

Journey Time Capability target score to be achieved by Specified Line Upgrade ( K TAR ) ( as set out in Appendix 5A of Schedule 2.1 of the PPP Contract )

Increase in
Underlying ISC

Earliest Implementation Date

Latest Implementation Date


Jubilee
Line Grouping

13.91

£8,846 per payment period until 6th January 2012 and zero for all periods from 7th January 2012

5 th January 2003

31 st December 2009


14.58*

0

7 th January 2012

7 th Janaury 2012


Northern
Line Grouping

14.89

0

6 th January 2008

7 th January 2012


Piccadilly Line Grouping

17.82

£65,400 per Payment Period

17 th October 2010

11 th October 2014
* the target score for this Specified Line Upgrade corresponds with higher passenger demand assumptions, represented by changes to Fixed Parameter. The Benchmark is also reset at 7 th January 2012.

Table 2 - Train Refurbishments



Line

Name of Project

Latest Completion Date

Deduction for Late Delivery per Payment Period

Snagging Item deduction per Payment Period


Jubilee

Train Refurbishment

27 th May 2017

£750,000

£10,000


Northern

Train Refurbishment

27 th May 2017

£1,600,000

£10,000


Piccadilly

Train Refurbishment

11 th October 2014

£400,000

£10,000


Table 3 - Enhancement to Station Facilities



Line

Name of Project

Latest Completion Date

Deduction for Late Delivery per Payment Period

Snagging Item deduction per Payment Period


All Stations on all JNP Lines not subject to a Station Modernisation or Station Refurbishment ( as defined in Appendix 15 of Schedule 2.1 ) by the date of the first Periodic Review

Enhancement to Station Facilities

First Periodic Review

£20,000

£10,000


Table 4 - Station Modernisation, Enhanced Station Refurbishment and Station Refurbishments



Line

Name of Project

Latest Completion Date

Deduction for Late Delivery per Payment Period

Snagging Item deduction per Payment Period


All JNP Lines

Station Modernisation

Modernisation Completion Date

£200,000

£10,000


All JNP Lines

Enhanced Station Refurbishment

Enhanced Refurbishment Completion Date

£125,000

£10,000


All JNP Lines

Station Refurbishment

Refurbishment Completion Date

£50,000

£10,000


Table 5 - Station Accessibility Projects



Line

Name of Project

Latest Completion Date

Deduction for Late Delivery per Payment Period

Snagging Item deduction per Payment Period


Jubilee

None

-

-

-


Northern

Golders Green

7 th January 2006

£11,000

£10,000


Edgware

29 th May 2010

£12,000

£10,000


Morden

7 th January 2006

£6,000

£10,000


High Barnet

29 th May 2010

£12,000

£10,000


Piccadilly

Acton Town

4 th January 2005

£11,000

£10,000


Oakwood

25 th June 2007

£13,000

£10,000
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