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PFI HAS COME OF AGE SAYS CHANCELLOR

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Chancellor Kenneth Clarke said today that the public did not judge a business by the machinery or buildings it owne...
Chancellor Kenneth Clarke said today that the public did not judge a business by the machinery or buildings it owned. They decide a business is good by the service provided and the same should apply to government.

Speaking to the CBI PFI conference in London, Mr Clarke said that with £5.5bn of deals agreed already, PFI was already proving the point:

'Modern governments should not believe they are a better government because they own more buildings. What counts is the quality of the services provided from those buildings. The PFI is about delivering better services by combining the strengths of the public and private sectors working in partnership, each focusing on the areas it does best. This approach, drawing on the strengths of each party underlies the allocation of risk in PFI projects. The party that can manage the risk at lowest cost should be responsible for it.

'PFI is happening. Over 1,400 possible projects have been identified. Well over 100 are in procurement today. Every week theory is being translated into reality. On 20 June the DSS announced its preferred supplier for an £80m partnership to develop and run its estate in Newcastle. The previous day the DfEE announced another package of pathfinder projects in education, boosting the total to 34 with a capital value of some £300m. Work is underway on construction and operation of two new prisons in Bridgend and Fazakerley which are expected to deliver substantial savings.

'The Channel Tunnel rail link and the Second Severn Crossing have been followed by the signature of five contracts to build, manage and maintain major road schemes. Around £120m of private sector investment will help introduce a new benefit payment card to streamline services to the public and tackle fraud. Over 30 health sector schemes have been let and some of the smaller ones completed. Complex hospital projects were always going to be the biggest challenge, but those too are now coming through.

'The private sector response has been excellent. Over 6,000 private sector firms have registered an interest with the Private Finance Panel. The financial markets are following suit. We have seen a first PFI bond issue by the Road Management Group. Equity funds to invest in PFI projects are springing up at Innisfree, at CIBC Wood Gundy, at BZW and at Charterhouse.

'The prize of new business opportunities and better services for the taxpayer is one we will go on striving for. The results are there for all to see. The PFI has come of age'.

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