Guarantee scheme for big projects ‘could be expanded’
By Richard Johnstone | 29 October 2012
The government’s £40bn programme of funding guarantees for major infrastructure projects could be expanded if the scheme is over-subscribed, according to Chief Secretary to the Treasury Danny Alexander.
Speaking at the launch of the National Infrastructure Plan Strategic Engagement Forum today, Alexander revealed the Treasury had received more than 50 expressions of interest so far in the UK Guarantees scheme.
It will come into effect this week when the Infrastructure (Financial Assistance) Bill becomes law.
Alexander told the forum, which brings together government, construction and finance industry representatives to identify how to speed up infrastructure construction, that the guarantees would ‘accelerate’ projectsstalled due to adverse credit conditions.
He said: ‘There’s a whole range of things that as a government we are doing, not least passing on the benefits of our balance sheet to the wider economy through infrastructure guarantees.
‘The Treasury’s door is open for discussions with any project that potentially meets our criteria – nationally significant, financially credible, good value for the taxpayer, dependent on the guarantee, and ready to start construction within 12 months. We’ll deal with the expressions of interest as quickly as possible, and we really urge people to come and have a discussion if you think this might help.’
Alexander has already announced the guarantees would back the delivery of Crossrail trains in London. He added today that the government would ‘set out in due course’ the full range of projects bidding for backing.
‘We’ve had a lot of expressions of interest. There are a significant number of projects where we think this could really help, so we’re off to a very good start,’ he said.
Asked whether the programme could be expanded if bids exceeded the £40bn earmarked, Alexander said: ‘The Bill allows us to extend the amount of money available for guarantees should we wish to.
‘We have £50bn earmarked in the Bill [including £10bn for housing] and let’s make progress on using that first. But the Bill provides the power to increase the amount of guarantees that we offer. If it was necessary, we would certainly consider doing that.’
Alexander also revealed that the conclusions of the government’s review of the controversial Private Finance Initiative would be published ‘shortly’. He said that the forum, which intends to keep government informed of industry views on how to finance and build the projects contained in the National Infrastructure Plan, could help refine any proposed changes. It will next meet in January.