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Can Scotland's NPD grow bigger than UK PFI?
18 June 2012
Scotland’s NPD model, despite capping sponsor returns, is creating the hottest social infrastructure market for lenders in the UK. Manjot Gobindpuri talks procurement and pricing with Peter Rekkie, director of finance and structures at the Scottish Futures Trust.
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Relative to its size and population, Scotland has one of the largest public-private partnership-based infrastructure investment programmes in Europe. Since 1992, private finance has been the main source of funds for large government projects in Scotland. According to a recent report from the Scottish Government, some £5.4 billion ($8.4 billion) of private finance has been committed under signed contracts, mostly for new schools, hospitals and water infrastructure. The annual cost of these projects to the Scottish Government was around £660 million in 2009–10, and that figure is expected to rise year each year until 2032.
Before coming to power in May 2007, the Scottish National Party had been a consistent critic of PFI. In December 2007, the SNP administration published draft proposals for a Scottish Futures Trust (SFT), which it presented as an alternative to PFI. This document outlined proposals for the establishment of a new government-owned company that would...
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