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PFI receives pounds 500m boost

The Government gave a much needed boost to the Private Finance Intitiative (PFI) yesterday by announcing that it planned to fund pounds 500m worth of local government construction projects in 1998/9, double the amount it has agreed to finance this year. The decision should pave the way for a huge expansion of the

PFI, which is aimed at outsourcing construction projects to private contractors. Most of the pounds 500m wil be invested in schools and transport.

The Government has also introduced measures to streamline the PFI process which should speed up the award of contracts. The move comes in to response to growing criticism from the private sector of the PFI which has been dogged by heavy delays and bound up in bureaucratic red tape.

Hilary Armstrong, Local Government Ministe, said: "Authorities and the private sector can now use the opportunities PFI provides to remedy investment backlogs in schools, transport systems, police, fire, waste and other services."

Adrian Montague, head of the Treasury PFI Taskforce, said: "We have a lot of new projects in the pipeline. There is a huge amount of interest in the PFI."