The CBI at Harrogate: Finance / Morton heads funding task force: Michael Harrison and Mary Fagan round up developments at yesterday's conference

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The Independent Online
SIR ALASTAIR Morton, chief executive of Eurotunnel, is to head a new industry-government task force set up to encourage private finance for public sector projects.

The announcement by the Chancellor, Kenneth Clarke, at the CBI conference, came as the Treasury published new guidelines for potential private sector partners setting out how the initiative would work and where the opportunities lay.

Although the Government has identified almost 100 projects as candidates for private funding, City interest has been tempered by uncertainties over returns for investors.

Both the high-speed Channel tunnel rail link and CrossRail, the proposed London tube project, have been stalled by these worries.

The 15-strong working party, to be chaired by Sir Alastair, will have a majority of private sector representatives.

Among those already selected are Howard Davies, director-general of the CBI, Pen Kent, associate director of the Bank of England, Neville Simms, chief executive of Tarmac, Alan Gormley, a director of Trafalgar House, and Sheila Masters, an accountant with KPMG Peat Marwick.

Sir Alastair said the working group had not yet set itself any financial targets, but he indicated that the kind of projects it would concentrate on were ones where the private sector could offset costs of new projects with income stream from existing pieces of infrastructure.

This might involve allowing private operators to take over existing roads and charge tolls in order to help fund the building of new roads. Mr Clarke pledged that he would give the initiative a high priority once the Budget was out of the way.

Pressed on whether the Channel tunnel project, which has doubled in cost to pounds 10bn and will be a year late in opening, was a good advertisement for the initiative, Sir Alastair said it had proved a good training ground for the task ahead.

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