Barclays will pay only half of the £50 million it promised in sponsorship to the Mayor’s “Boris Bikes” hire scheme, it was confirmed today.
Transport for London admitted it expects to have received a “net total” of £25 million by the time the five-year-deal expires in August 2015.
It came as TfL bosses began the search for a company to replace Barclays and pay a minimum of £37.5 million to secure the rights to a new seven-year branding deal. Mr Johnson said:
This is a unique opportunity for a commercial partner to put their stamp on a mode of London transport that is now as recognisable as our iconic black cabs and red buses.
A TfL spokesman said Barclays had paid £20.4 million by last week. The bank initially pledged £25 million when the scheme launched in July 2010.
A further £25 million was announced by the Mayor in July 2011 but the bulk of this failed to materialise because TfL’s bike contractor Serco failed to deliver the promised number of bikes on time, and Barclays decided not to extend its sponsorship until 2018.
TfL’s director of commercial development Graeme Craig said – without criticising Barclays – that it was now searching for a partner who “gives a damn” about the hire scheme and backed the wider aims to promote cycling in London.
Several firms outlined their interest when it emerged last December that Barclays was withdrawing. The new deal will cost the sponsor £5.5 million a year – 10 per cent more than the initial Barclays deal. This will be the most lucrative such deal in the world – beating the US $47.5million five-year deal in New York.
London’s 11,200 bikes and 722 docking stations will be rebranded and could be repainted a different colour. TfL says it will refuse to deal with tobacco companies and arms dealers.
The chosen firm is due to be announced by the end of the year. Unlike the current deal, its payments will be based on TfL’s promotion of the scheme rather than the number of users and bikes.
Barclays said its initial contract was worth “up to £25 million” while only the “heads of agreement” were signed for the second deal, not the final contact.
A Barclays spokesman said: “We are delighted to have been part of launching the scheme. It’s been excellent for London. We wish it every success in the future.”