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PARTNERSHIPS UK PLAN GETS MIXED REACTION

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The announcement yesterday of Partnerships UK, a part government-owned bank which will provide private sector exper...
The announcement yesterday of Partnerships UK, a part government-owned bank which will provide private sector expertise and funds to the public sector in order to define and develop PFI projects, drew mixed reactions from the City, according to The Financial Times (p12).

Tony Poulter, global head of project finance at PricewaterhouseCoopers, said: 'This doesn't look like an attempt to compete with the private sector. It is focused on sensible things like better early-stage project development in the public sector, and providing special funding to the private sector for specific parts of the deal.

'If this is managed sensibly it should lead to better projects, more deal flow and some perfectly sensible downward pressure on the rate of return which investors expect.'

But Charles Cox, chairman of the CBI's public procurement and efficiency committee, said the association was worried that Partnerships UK would have conflicts of interest, including seeking the best deal for the public sector while wanting finance arrangements which gave it the best return.

'The intent is right but there is a lot to sort out in the implementation to ensure these issues are dealt with,' he said.

However, the Treasury said conflicts of interest need not arise, and Partnerships UK would invest only if both the public sector and the private financiers of the project agreed.

Its deals would be examined by the National Audit Office and the public accounts committee, it said.

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