'PFI bank' lined up to bail out Crossrail scheme

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The Independent Online

Crossrail, the proposed £16bn Heathrow-to-Essex rail link, could be saved by the specialist bank set up by the Treasury to bail out the beleaguered private finance initiative (PFI).

Speculation has mounted that Crossrail's scheduled 2017 opening will have to be postponed as the private sector struggles to raise its £6bn contribution in the current market. However, the so-called "PFI bank", which was set up earlier this year, could see its remit expanded to include Crossrail.

The bank provides part of the debt to PFI schemes should they not be able to attract enough loans from privatesector institutions. The bank expects to retrieve its investment at a profit when the loan market recovers.

Sources said that transport department and Treasury officials have held informal discussions about expanding the bank's scope into rail procurement, specifically Crossrail. A Whitehall source said: "The institution was set up to lend to PFI projects. But it was always possible that the remit would evolve over time."

If the bank's involvement were necessary, it would probably provide only a small part of Crossrail's finance. The Department for Transport's funding is capped at £5bn, while Transport for London is to provide £2.7bn from fares.