Gold star
The Private Eye transport correspondent notes (in issue 1537) that the Department for Transport has taken no rail franchises in-house since the SARS/CoV2 epidemic made nonsense of every franchise deal. "Meanwhile, the Welsh government's response to the same problems is to take its kaput franchise in-house, minimising outsourcing 'management fees' and diverting effort from obsessing over contract terms and payments to running and upgrading trains."
The naughty step
In the same article, Hedgehog notes:
It's back to the future in Wales, where a new road-widening contract shows how Labour ministers are using complex private-finance deals to hide borrowing liabilities from their books, at enormous cost to taxpayers.
Most people have long since accepted that public private partnership (PPP) infrastructure schemes, many using the private finance initiative (PFI), saddled public bodies with ludicrous annual charges for decades. But the Labour-led Welsh government ha concocted a new called the "mutual investment model" (MIM). Ministers reckon PFI's pitfalls will be avoided because this time the public sector will have a small stake in each multinational consortium.
First up is the contract to widen a road near Merthyr Tydfil, adding one extra lane and a central reservation for 11 miles. Taxpayers will pay nothing until 2025 - but then cough up £38m a year for 30 years. That's a whopping £1.14bn in today's prices, before adding VAT and inflation, to cover the consortium's financing, road maintenance and profit.
That pay-back start date of 2025 raises suspicions. It just happens to be (emergencies aside) that of the next Welsh general election but one. Mark Drakeford and comrades may presumably look to be returned to power in 2021, taking advantage of the anti-Conservative feeling which is bound to persist as the consequences of Brexit and the SARS/CoV2 epidemic emerge. Are they then plannng to scuttle and run leaving a new lot to explain away the additional charge on the transport budget?
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