Ex-Tory minister slams Railtrack saga
John Redwood, the MP and former Tory department of trade minister, has lambasted the government's handling of the Railtrack administration, claimed it has 'derailed' private finance initiatives.
Writing in this week’s Accountancy Age Redwood said: ‘Anyone contemplating a joint venture or an agreement with the government will now want stronger gurantees.’
He added: ‘Anyone thinking of a venture with the government may well now want bigger upfront payments, or payments in escrow, to protect themselves against a change a change of mind by ministers.’
In other words he predicted a huge effort to shift the burden of risk onto government in PFI deals.
But replying in the same edition John Spellar, minister of state at the department of transport, denied the government forced Railtrack into administration.
‘Railtrack is a company with many excellent and dedicated staff, but also one with many problems. Not least of these is an endemic inability to control costs and manage contracts,’ Spellar said.
Referring to the administration order he said: ‘The court made the order because it agreed with this assessment.’
Links
For & Against: Putting Railtrack into receivership