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PFI or not PFI?

That is the question hanging over privately financed infrastructure in Scotland.

POLITICIANS WASTED no time blaming the private sector for last weekend's sewage spill in the Firth of Forth. The failure of a pump at the privately operated Seafield sewage works caused more than 100M litres of raw effluent to be pumped into the Firth of Forth.

'Investment is urgently needed at Seafield to stop a repeat of this serious spillage.

Untreated sewage must never again end up in the Forth, ' said the Green Party's Mark Ballard, who is standing in next week's Scottish Parliament elections.

But Scotland's first minister Jack McConnell said PFI was not to blame. 'This was not caused by financing problems but by a mechanical failure, ' he said, announcing a public inquiry into the spill.

The plant is maintained by Scottish Water Solutions under a 30 year PFI deal. One of its shareholders, Thames Water, is responsible for the Seafield works through the Stirling Water consortium comprising Thames, Gleeson (now Black & Veatch) and Alfred McAlpine.

Whatever the inquiry into the incident throws up there is no doubt that the role of the private sector in operating and maintaining Scotland's infrastructure is a political hot potato. In a recent BBC poll carried out by ICM, it was cited by voters as the issue of most concern to the public.

So plans for further privatisation are not particularly popular.

Were the Liberal Democrats and the Conservatives to gain a majority in next week's Scottish Parliament elections they would convert Scottish Water into a mutualised concern owned by its customers. Under the Conservatives this could eventually be privatised, although the Lib Dems would oppose this. Labour, on the other hand, pledges to continue to seek to strengthen public ownership and accountability.

Of the big four parties, only the SNP advocates a replacement private capital system of financing infrastructure projects. The SNP would establish a trust to take forward the use of bonds for borrowing, as is common in the United States.

But the party does not anticipate it would be utilised widely in the next parliament.

'We want to squeeze out PPP/ PFI over time. Schemes which are on the drawing board would continue as currently proposed.

Local authorities would retain the option of PFI but we want to provide them with an alternative. Our approach is steeped in value for money, ' says a spokesman.

The other big question hanging over privatisation - or rather re-nationalisation - concerns Scotland's railways. Although both Network Rail and Labour denied reports of specific talks last year about the not-for-profit infrastructure company taking over train operations when First Group's franchise runs out in 2011, the option will clearly be discussed. Labour's manifesto says 'The case for running the Scottish franchise on a not-forprofi basis needs to be fully examined.' Other parties are cautiously supportive.

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