interestrateripoff Posted March 3, 2009 Share Posted March 3, 2009 http://www.telegraph.co.uk/finance/economi...criticised.html The Chancellor Alistair Darling has finalised details to set up a Treasury unit to provide funds for private finance initiative projects stalled by the recession and the failure of companies to raise money from the banks.An estimated £1bn-£2bn will be available to the unit over the next year to try and ease bottlenecks caused by the withdrawal of foreign investors providing senior debt. An estimated 110 projects costing £13bn are currently in the PFI pipeline. Mr Darling is anxious to avoid further delays to key projects as well as helping the construction industry. Only a handful of schemes have been given the go-ahead since the banking crisis began to slow developments last summer. Vince Cable, Liberal Democrat Shadow Chancellor, said the government was trying to give the "kiss of life" to a "dishonest system of accounting, designed to hide taxpayers' liabilities." "If the private sector cannot now come up with the money and is unwilling to take the risks we need to move to a simpler, more honest system of public investment for public projects." Is this QE money? Quote Link to comment Share on other sites More sharing options...
THE BALD MAN Posted March 3, 2009 Share Posted March 3, 2009 http://www.telegraph.co.uk/finance/economi...criticised.htmlIs this QE money? PFI is an abbreviation for Gordans version of Enron. PFI is the disaster as predicted as this forum. Quote Link to comment Share on other sites More sharing options...
Patfig Posted March 3, 2009 Share Posted March 3, 2009 Eff me rigid, PF phucking I, what a w@nker. He is insane. Profitless F_cking Idiot (off balance sheet off course) Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted March 3, 2009 Share Posted March 3, 2009 Obviously the project costs are too high and the contractors will have to re-tender. (which, as these projects are likely to be the market in the immediate future, will have a nice side-effect of substantially reducing the costbase laterally across it for all concerned - opening the window for demand substitution) Did someone scoop out Darling's prefrontal coretex and replace it with a double helping of mushy peas? Quote Link to comment Share on other sites More sharing options...
Patfig Posted March 3, 2009 Share Posted March 3, 2009 Obviously the project costs are too high and the contractors will have to re-tender.(which, as these projects are likely to be the market in the immediate future, will have a nice side-effect of substantially reducing the costbase laterally across it for all concerned - opening the window for demand substitution) Did someone scoop out Darling's prefrontal coretex and replace it with a double helping of mushy peas? Mushy peas are delicious.......................................... Quote Link to comment Share on other sites More sharing options...
laurejon Posted March 3, 2009 Share Posted March 3, 2009 PFI what a joke. We own the banks that own the PFI debt, any normal Government would realise this and fck them over, shut them down or completely nationalise them and write off our childrens PFI debt. HSBC have huge investments in PFI, its time we all clubbed together, removed our savings from HSBC and bankrupt them. The taxpayers is paying huge sums for PFI projects to banks, and bailing the very same banks out too so in effect paying twice!!!. Gordon Brown is a traitor to the British, and he should be brought to justice. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted March 3, 2009 Share Posted March 3, 2009 They still continue with the Public Fraud Initiative so they can keep their overspending off the governments books. As for risk being transfered to the private sector, what utter f***g bullsh1t, firstly clauses meant the government made up for any budget problems and secondly we own these banks anyway. The government can borrow more cheaply than any private enterprise, if Labour are going to descend into their traditional orgy of tax and spend, they should just be honest and put in on the public balance sheet. Quote Link to comment Share on other sites More sharing options...
ChumpusRex Posted March 3, 2009 Share Posted March 3, 2009 Unfortunately, the brave firms that queued up to milk the cash cow of central government by providing off-balance sheet funding for capital projects, seem to have hit a bit of a snag. It appears that the 29% annual return on investment - a high price admittedly, but the idea of the scheme was that the private sector took 100% of the risk, not the public sector - is not enough to keep these companies solvent, as they have fallen victim to failing credit ratings and inability to continue operating due to lack of funds. So, rather than letting the companies call in the administrators, in an attempt to sell assets in order to keep the projects on track (why else would the govt be paying 20% in annual fees?), what do Gordon's bunch of cronies do? They bail them out. They take the private sectors risk (that they are paying through the nose for) and take it onto the govt's own balance sheet - the very thing that PFI was designed to avoid. Can there be any more blatant evidence that PFI was never about limiting goverment borrowing, it was about kickbacks to 'chosen' private companies? Government bails out PFI firms She (Yvette Cooper) said some projects were "finding difficulties obtaining sufficient debt as a result of the global credit crunch" and the government would lend to those that could not raise the money on acceptable terms.The money would initially be found from "unallocated funds and departmental underspends on previous projects", she said. "It will be a temporary intervention. As with normal commercial lending these loans will bear interest and will be repaid over the life of the project," she said. Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted March 3, 2009 Share Posted March 3, 2009 Hang on a second. If the Government effectively owns the PFI companies, doesn't that effectively cancel the debt. Quote Link to comment Share on other sites More sharing options...
copydude Posted March 3, 2009 Share Posted March 3, 2009 Can there be any more blatant evidence that PFI was never about limiting goverment borrowing, it was about kickbacks to 'chosen' private companies?Government bails out PFI firms Utterly corrupt and shameless. The money would initially be found from "unallocated funds and departmental underspends on previous projects", she said. Underspends? Under Labour? Yeah right. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 3, 2009 Share Posted March 3, 2009 Private Public Finance Initiative There, easy, don't even need to change the acronym. Quote Link to comment Share on other sites More sharing options...
rex Posted March 3, 2009 Share Posted March 3, 2009 This is wrong. The reason why the companies are struggling to raise finance is because the bank markets are seized up, not because the companies themselves are on the verge of going bust. Its not about keeping current projects on track; its about bringing new projects to the market so that the new schools etc can be built. The borrowing is needed to pay for the relevant infrastructure to be built, not to keep paying to maintain operational projects. And the reason why the Govt is thinking of "bailing them" out is because it thinks that this will help to limit the length of the recession. Ie spend us out of it. Credit ratings of the companies you talk about are largely irrelevant. PFI is limited recourse financing, so the money is lent to an empty shell vehicle with very little recourse to the "real" sponsor companies sitting behind it (ie an administrator of the shell vehivcle would have no access to the assets of the sponsor companies). THe banks "price" the deal (ie assess the risk) based on their due diligence of the documents and the project structure, not the credit rating of a sponsor company who is not the borrower. That is what defines a project financing, of which PFI is simply a variation - it is limited recourse Quote Link to comment Share on other sites More sharing options...
dispossessed Posted March 3, 2009 Share Posted March 3, 2009 The whole concept of PFI is now shot. Originally done so that the government didn't have to find the money itself... But now these firms are using government money which has been lent to the banks to build and run things for the government - and at a profit. Meanwhile, government, or our money, is being used to pay these people handsomely? What a gravy train! Quote Link to comment Share on other sites More sharing options...
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