By Tash Shifrin
Greater Manchester Waste Disposal Authority has authorised its officials to pay more than originally planned as it struggles to sign off its £4.6bn Private Finance Initiative scheme.
Greater Manchester Waste Disposal Authority has authorised its officials to pay more than originally planned as it struggles to sign off its £4.6bn Private Finance Initiative scheme.The authority was also set to raise its borrowing limits for the next three years for the second time in five months, in an attempt to plug a financing gap in the huge waste disposal PFI scheme, board papers reveal.
GMWDA’s scheme has been repeatedly delayed. But fluctuations in the financial markets could push the PFI deal beyond the price the authority had expected to pay.
Its January meeting authorised officials ‘to agree a final price and funding package marginally above the affordability envelope at the time the deal is concluded’.
In an unusual move, GMWDA is set to become a senior lender to its own PFI scheme, in addition to its capital contribution.
To make this a possibility, the authority was forced to raise its operational borrowing limits from £31m this year to £101m, with a similar increase to take the borrowing limit to more than £100m for each of the next two financial years.
But agenda papers for the authority’s March 6 meeting include proposals to hike the limits again, with new authorised borrowing limits peaking at £145m in 2011/12 – almost four times the level of five months previously. The documents add that funding requirements were ‘still not certain’, however.
The authority’s special purposes committee also agreed to make a submission to the Department for Environment, Food and Rural Affairs for additional PFI credits in February. But a Defra spokesman told Public Finance that no further funding had been agreed.
