The government could have to bail out Private Finance Initiative projects to the tune of £4bn in the next 18 months, an industry spokesman has warned.
According to the spokesman for the Public Private Partnership Forum the recession is limiting loans.
A little explanation for the uninitiated.
PFI is the method by which Labour has been financing major public works projects. Encouraging construction companies to borrow commercially to pay for projects which the government then repays, with arrangement fees, profits and bonuses of course, over twenty, thirty, forty years. Basically mortgaging the nation to the hilt for the next generation or two.
The cash is drying up fast. The proposal on the table is that the treasury should lend the money for the PFI contracts for the system to be maintained.
Let me think about that for a moment. Hmmm…..
We the taxpayers are being asked to lend our money at the lowest interest rates in history to construction companies who are going to use it to build our public works projects. Then they are going to charge us (with arrangement fees, profits and bonuses) for the privilege for the next few decades and make massive profits.
Does not sound too popular to me!