Transport for London (TfL) obtained a government rescue of £ 1.6 billion after the coronavirus pandemic caused its revenues to drop 90%. However, the terms of the deal could mean that Londoners will pay a high price once the blockade is lifted.
London mayor Sadiq Khan warned that underground and bus services should be cut if a financial injection was not agreed at the end of the day.
A source close to his office said that rates are expected to rise under the terms of the deal, according to Sky News.
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The new agreement will also see government officials joining TfL's board of directors.
The deal came just days after reports surfaced that TfL was at risk of losing £ 4 billion.
£ 505 million of the deal will take the form of a loan.
Stay-at-home orders saw the number of TfL passengers collapse during the COVID-19 epidemic.
The transportation authority suspended 7,000 employees to access government money to subsidize their wages and save money.
Despite the shutdown of 300 construction projects, their costs are still running at £ 600 million a month.
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It is not clear whether the rate increases would be higher or lower than the rate of inflation.
All details should be confirmed to the city this morning.
The news comes after London Mayor Sadiq Khan warned that TFL staff could face a severe blow if there was no government deal on a grant.
The mayor of London admitted that he was concerned about the possible disruptions and the lack of money from TFL to manage the services before reaching an agreement.
Speaking to LBC, Mayor Khan previously said: "We spend £ 600 million a month, pay for services and receive little, if any, from our customers, and although we do have ; a cash reserve of more than 2.1 billion pounds sterling, that ends.
"The law requires us to keep two months of money in reserve to pay for services, so we get involved in weeks and weeks of negotiations with the government and it is really difficult to get their support."
"To be frank, today is the last day. Unless the government confirms the subsidy we need, the consequences would be pretty serious.
"The ramifications for all of us would be huge, so I hope the government will accept a grant today for TfL to help us.
If they don't, I worry about the consequences. "
When asked to explain the consequences that TfL users could see, Khan said that a lack of money could force the transportation network to further cut services.
Mr Khan continued: "Because we cannot go bankrupt, we have to make sure that we have the money to pay for the services. The only way to balance the books is to cut the services."
"Ironically, when the government wanted us to increase services, increase services, start the recovery phase, we could be asked to cut services because the government has not provided us with the financial support we desperately need ".