12 October 2001
James Stewart, chief executive of Partnerships UK, the PFI 'centre of excellence' that succeeded the Treasury Taskforce, said ministers did not believe that Railtrack's failures reflected on the Private Finance Initiative and PPPs in general.
The decision of Transport Secretary Stephen Byers to convert Railtrack into a non-profit-making trust without compensation for its 250,000 shareholders has cast doubt on the ability of other private sector operators to raise the necessary finance.
London Mayor Ken Livingstone was quick to exploit the anxiety with another attack on the government's plans for the Tube. He said that 'in the new political climate' ministers should hand the Tube over to his transport commissioner, Bob Kiley, at once. Livingstone said: 'Chaos and the waste of public money caused by the fiasco of the national rail network demonstrate the folly of repeating Railtrack underground.'
But, speaking at the Second Annual Public Private Partnerships/Private Finance Initiative Global Summit on October 10, Stewart said that he had received assurances from ministers that the government would still turn to the private sector to deliver services.
'This [Railtrack] will not affect the PPP market. The government views PPP as completely different. Some might say that privatisation was the old model and PPP is the new model,' he said.
However, Stewart admitted that the government faced an uphill task in convincing the public of the need for PFI deals.
PFoct2001
