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Politics dooms public/private mix


UK POLITICAL meddling is threatening to make public private partnerships (PPPs) untenable, said former editor of The Times and member of the Millennium Commission Simon Jenkins last week.

Speaking at an Institution meeting reviewing Britain's Millennium projects, Jenkins said that interference by politicians in major public interest projects being run by private firms was driving up costs to the point where there was no advantage in procuring through PPPs at all.

'Government interference makes the cost of private capital so expensive it's almost impossible to get value for money, ' he said.

Recent bad experiences on high profile projects, including the privatisation of London Underground, Wembley stadium, construction and operation of the Dome, and Railtrack, mean private financiers and project managers are now wary of government interference, Jenkins argued.

Even when schemes are firmly in the private sector, politicians often take an unhelpfully close interest in them if they are in the national interest, making them political footballs.

'Even though it was privatised, there was almost nothing in Railtrack that could be done without the government interfering. Railtrack was in the public sector even if not with a capital P and capital S, ' he said 'And there can be no doubt at all that as a commercial venture the Dome was enormously badly conceived, ' he added. 'It was in London for political reasons and politics are almost never co-terminous with commerce.

'Banning cars was stupid, as was busing school groups of children to the Dome without their parents.' In all 3M extra visitors could have been attracted if the location and transportation policy had been different, he suggested.

And he pointed out the dangers of a project being too closely identified with a government, or even a single politician:

'Peter Mandelson was the Dome's greatest champion and its worst handicap. And it was worrying to know that whenever the government did something wrong, the Dome would take flack. The press were merciless.'

Jenkins predicted that the Millennium Exhibition site could now lie derelict for decades, as have the sites of World Fairs, Expos and Empire Exhibitions staged last century.

Politicians should leave the private sector to 'get on with the job' if they want to use it as a procurement route. Alternatively, government should back wholesale public sector ventures, avoiding private corporate structures altogether, he urged.

Jenkins claimed that cultural differences made it impossible for private sector principles to work in the state sector.

'It is ridiculous to pay private sector managers silly salaries to work in the public sector to find that they can't cope, ' he said.

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