Privatisation: Tarmac pays back pounds 22m on sell-off

The building firm Tarmac Construction is to pay the Government more than pounds 22m in an adjustment after the privatisation of PSA Projects. The Secretary of State for the Environment, John Gummer, said in a Commons written reply that the payment comprised pounds 19,921,177 plus interest.

PSA Projects provided design and project management for big government construction schemes.

Mr Gummer said that when PSA was sold in December 1992, Tarmac was paid pounds 49.6m as compensation for future losses and commercial risk, and to provide funds for a pension fund contribution, investment and working capital. His department retained pounds 55m of pre-sale trade debts which were all collected. In addition to the payment of pounds 49.6m, Tarmac received pounds 10.5m for net liabilities transferred with PSA Projects.

He said that under the terms of the sale, this sum was subject to adjustment following details of PSA Projects' net asset position at the point of sale. Mr Gummer said an independent expert had now reported on the asset position and calculated the payment due.