Crossrail confirmed for UK Guarantees
25 September 2012
Chief Secretary to the Treasury Danny Alexander has announced that the rolling stock procurement for London’s Crossrail scheme will be the first to benefit from the government’s UK Guarantees scheme.
Speaking at the Liberal Democrat party conference, Alexander said the scheme would be “the first of many” across the country to be underwritten by the government.“We need to make sure the Crossrail rolling stock is delivered on time,” said Alexander.
The trains are being procured under a PPP scheme but Alexander said progress is being delayed by the difficult financing conditions.
It is also believed that the Thames Tunnel project to vastly increase London’s sewer capacity will receive a government guarantee.
Meanwhile, at a separate event, Infrastructure UK chief executive Geoffrey Spence gave further clarity on the guarantees scheme.
For PFI and PPP deals, Spence confirmed that the Treasury will provide a maximum of 50% of co-lending in any project.
However, major public projects looking to use the guarantees to access private finance could see more than 50% of the project’s value being underwritten. That would require the project to come onto the government’s balance sheet, he added.
Spence also said the terms and conditions of the guarantees would be similar to those used by the European Investment Bank.
