A source close to the deal said the big advantage of this scheme for would-be investors was that it radically reduced the risk for financial backers by guaranteeing payments for work carried out, even if any of the parties to the contract collapse.
The source said: "It enables funders to have a reasonable degree of certainty that if Chiltern merges with another firm, or collapses, the funder's assets will be treated as central to the operation."
The source said the deal was a step in the right direction after the Railtrack debacle. "Franchise deals of this kind have been very slow so far. This is a bit of progress."
The decision to go ahead with the scheme comes as speculation mounts over how large-scale rail work will be procured after the collapse of Railtrack.
One PFI expert said the government was looking at two models. In one, train operating companies would be linked up with contractors such as Bechtel or Jarvis in so-called special purpose vehicles; in the other, the SRA and Railtrack's replacement would play a central role in overseeing projects.
No comments yet