The Government admitted yesterday that the £5bn M25 widening PFI was yet to reach financial close, and it was “not yet determined” whether the Treasury’s new PFI funding pot would be used to plug the shortfall.
Under questioning from Conservative shadow transport minister Stephen Hammond, transport minister Paul Clark would not reveal current etimates for widening junctions 16 to 23 and junctions 27 to 30 of the M25, saying the information was “commercially sensitive” until the contract is formally awarded to the preferred bidder Connect Plus, on financial close of the PFI.
However, Clark said: “The last estimate, prior to receipt of tenders for the DBFO contract, was made in July 2007. At that time the cost of widening junctions 16 to 23 was estimated at £697M and junctions 27 to 30 at £583M.
Hammond also asked how much of the money for the M25 PFI would come from the public purse.
“As these works are being procured through a Private Finance Initiative (PFI) contract it is planned that they will funded by borrowings from the private sector which are recovered from the Highways Agency out of availability payments over the life of the contract.
“These payments are subject to contractor performance. In light of current financial circumstances the Government may elect to lend to the project if insufficient private sector funds are available, however this is not yet determined,” he said.