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Private sector to pay for using PPP troubleshooter

COMPANIES FACE the prospect of paying to use the Treasury's private finance task force when it is privatised in the autumn.

They will have to pay for between 33% and 67% of the development costs of a scheme, as this is how much the new body expects to spend helping to put projects together.

The Government announced plans to privatise the task force, now called Partnerships UK, on Tuesday. In the autumn a majority stake in PUK will be sold to private investors, with the Treasury holding a large minority stake.

PUK will help Government departments and local authorities to develop private finance projects and then recover its costs from the successful consortia.

Major Contractors Group chairman Keith Clarke said paying for PUK was not a problem for contractors as these could be built into bid costs.

But he added that it was important PUK's costs be included when comparing private finance projects with publicly funded schemes. This would ensure that PUK kept its charging regime under control to avoid making privately financed jobs unviable.

PUK will earn fees tied to expected cost savings resulting from the fact that a scheme is built using public rather than private finance.

PUK chief executive James Stewart said he would invest in projects which did not fit the traditional private finance formula.

He added that this money would be seed corn finance rather than loans.

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