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Taxpayers' money to be used for PFI projects

Gordon Brown is set use taxpayers money to fund big private finance initiative deals in order to accelerate projects stalled by the credit crunch.

In a bid to get multi-million pound deals off the ground in the face of the banks reluctance to lend, the Treasury is working on plans that could see an infrastructure fund created to provide long-term bridging loans from the taxpayer to PFI projects.

Alternatively, departments such as local Government, which sponsor PFI projects may undertake the lending.

Since the onset of the credit crunch some large waste PFI projects have been stalled because fewer banks were prepared to lend over the long term.

The Prime Minister was pressed by the Liaison Committee on the funding problems (12 February). He told MPs: We have been looking, obviously, at the PFI and we have been looking at it 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.

A Treasury spokesman said: The Treasury will be coming forward with detailed proposals in the next two or three weeks.

MRW recently revealed that the Greater Manchester PFI stakeholders including Greater Manchester Waste Disposal Authority, the Viridor Laing consortium and the group of banks financing the project are increasingly confident that the deal will be finalised before the end of February now that the banks involved are close to agreeing the structure of the finance (see MRW story).

 

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