341.Sections 213 to 217 enable “key system assets” to be designated by agreement between London Underground and a PPP company, thereby giving the assets special protection under the Act.  Section 215 extends the same protection to assets owned by third parties (such as a train leasing company) and used in connection with the Public-Private Partnership.  It enables London Underground to enter into agreements directly with such third parties.
342.The effect of these provisions is that, without the consent of LRT (later TfL), designated assets cannot be transferred to another party, nor can any interest in or security over the assets be given to a third party.  Designated liabilities cannot be released, discharged or transferred to another party without consent.  Any transaction which contravenes these requirements will be void.  No execution or other legal process can be commenced or continued, and no distress can be levied, against any property or rights which are key system assets.
343.The purpose of such a regime, which is based on that for “franchise assets” under section 27 of the Railways Act 1993, is to give statutory protection to the assets needed to run the Underground railway so that they will not be lost and will be immediately available to the public sector at the end of a PPP contract, ensuring that train services can continue without interruption.
344.Section 217 enables TfL to transfer key system assets between TfL, its subsidiaries, PPP companies and PPP related third parties. This provision is necessary to ensure that designated key system assets can be returned to the public sector at the end of a PPP contract.  It also enables the Mayor, at the end of a PPP contract, to transfer such assets direct to new PPP companies if he decides to enter into new PPP agreements.  A transfer scheme must be made in accordance with the terms of the PPP agreement and it must be approved by the Mayor to take effect.  This section also introduces Schedule 12 which sets out the detailed provisions applying to a PPP transfer scheme.
Commentary on Sections Part Iv: Transport Chapter Vii: Public-Private Partnership Agreements Sections 213 to 217: Key system assets