Fears that PUK will be watered down

11 May 00
Last-minute changes to the business plan for Partnerships UK (PUK) are likely to turn its launch into a 'damp squib', according to the shadow economic secretary to the Treasury.

12 May 2000

Tory spokesman Howard Flight told Public Finance that the original concept for the successor body to the Treasury Taskforce had been watered down. In particular, there would be heavy restrictions on PUK's ability to take an equity stake in the projects it supports.

'If it ends up being more curtailed than the original vision, then what is the motivation for the private sector investor?' he said.

PUK's role will be to promote take-up of the Private Finance Initiative and other forms of public-private partnership (PPP). It will itself be a PPP, with 51% of its equity in private hands.

The official launch will take place early next month when new chief executive, James Stewart, is expected to take over. Stewart, currently Newcourt Capital's head of project finance for Europe, is seen as a 'safe pair of hands', with experience of both advising and investing.

His first role will be to outline the business plan developed by NM Rothschild, the government's adviser. This will clarify a number of issues, including the level of equity involvement.

But Flight claimed that the Treasury was still mired in confusion over PUK's role.'The big question is: what the hell is this thing supposed to be doing? It really hasn't been resolved at all.'


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