The Treasury is working on measures by which existing PFI projects that some people think may be at risk can be secured.
Gordon Brown
Prime Minister Gordon Brown told the House of Commons liaison committee yesterday (February 12) that the Treasury was working on measures to help secure PFI projects which were at risk and that the Treasury would be making a statement on the subject imminently.
The comments come following ongoing delays to the Greater Manchester Waste Disposal Authority's £3 billion contract with Viridor and Laing due to difficulty raising finance – the kind of project likely to benefit from the proposals.
At the committee hearing, Mr Brown was grilled on a range of domestic and international issues, in which Edward Leigh, Conservative MP for Gainsborough, and Barry Sheerman, Labour MP for Huddersfield, raised the issue of PFI.
In particular, Mr Sheerman raised “serious concern” about problems experienced in raising finance in Manchester, Birmingham and London – where he said banks would not commit to 25 years but 7-10 “with a break in the middle”.
Responding to this, Mr Brown said: “We have been looking, obviously, at the Private Finance Initiative and we have been looking in relation to the problems that private investors have. Many projects are still going ahead as planned, I just have to say to you, and many of the projects that we are looking at we believe we can find a way forward for, and I think you will find that the Treasury will announce what it plans to do in the next few days.”
Mr Brown added that half a dozen banks had indicated in the last few weeks that they would be willing to finance debt.
He said: “While individual authorities may have questions I think you will find that the Treasury is working on measures by which existing PFI projects that some people think may be at risk can be secured. I take very seriously what you say because we want these projects to go ahead.”
Commenting on the remarks, a spokesman for the Treasury told letsrecycle.com that he could not elaborate on the proposals until they were published.
However, owing to parliamentary recess next week, he said that the announcement was likely to be made in the next two weeks rather than the next two days.
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