CBS Outdoor to terminate advertising contract with London Underground and seek damages
It has been revealed that advertising giant CBS Outdoor has told London Underground Limited that it plans to terminate its contract because of delays to the networks upgrade programme.
CBS Outdoor has also made an order to the High Court seeking damages for losses to the company caused by delays.
Richard Sauer, executive vice president and general counsel at CBS Outdoor said: “For several years, CBS Outdoor has sought to engage London Underground in fruitful, bona fide discussions to address the extraordinary costs and delays attributable to them. Our contract with LUL contains a clear mechanism to address these issues. Consistent with its rights under the contract, CBS Outdoor is seeking a fair and equitable resolution of this matter.”
The company has said that it has invested in high-technology screens on track walls, digital escalator panels and LCD displays to create "what is arguably the most technologically advanced advertising infrastructure" on any public transport system, but that delays in Tube upgrades led to costs and delays in the programme.
The contract, which began in 2006, should have continued until 2015, but CBS Outdoor has today said its six month notice of contract will apply from 1 October with actual termination on 1 March 2012, unless the two can agree to new terms before this date.
CBS Outdoor has said: “The issue for CBSO is that LUL, and its parent company Transport for London (TfL), have refused to acknowledge that changes implemented by London Underground have resulted in an adverse event under the contract, requiring that LUL negotiate new contract terms reflecting the massive cost over-runs suffered by CBSO.
“The cost over-runs were caused primarily by fundamental changes within LUL, including the massively delayed PPP construction projects undertaken by LUL’s Infracos. These changes made it impossible for CBSO to gain the access and approvals, and to have the information, necessary to complete its upgrade work in a timely fashion and within budget.”