SKAT Excluded From PPP/PFI Inquiry

SKAT have been informed, in a communication from the Convenor of the Scottish Parliament's Finance Committee, that the Skye Bridge and its tolls will not be included in its current inquiry into 'value for money' of PPP/PFIs "due to the unique nature of the Skye Bridge project".

Further reason given for this amazing decision is that there was never a Public Sector Comparitor (PSC) calculation for the Skye Bridge as it had been decided that it would only be built by private finance or not at all. Since the inquiry is only interested in assessing PPP/PFI projects which can be compared to equivalent publicly funded ones, the Skye Bridge is excluded.

However, we know that the original projection by Mackay Associates of Inverness for the building of the Skye Bridge, including infrastructure, was based on traditional public funding methods and was put at approximately 18 million (ultimate PFI cost approximately 39 million). They may not consider this a true "comparitor" but, given the ongoing controversy over the cost-effectiveness of this scheme, wouldn't you think that such an inquiry would be well placed to put the whole thing under the economic microscope?

SKAT have argued consistently since 1999 that it would save the taxpayer 25 million if the Government were to buy out the toll concession and, so far, the Scottish Executive have not contradicted us. However, with the Scottish taxpayers' subsidies to the tolls revenue (i.e. the Bank of America plus VAT) rising to 2 million a year, it seems the Scottish Executive are determined to treat the Skye Bridge PFI as a sort of "holy cow" which must be maintained regardless of the cost and of its detrimental effect on the local community.

In 2001, Highlands of Scotland Tourism reported a drop in tourist figures for Skye of 21% compared to 8% for Inverness and 4% for Lochaber.

We may be a little cynical but we can't help remarking that assessing the "value for money" of the Skye Bridge project as a PPP/PFI would be most unlikely to produce results that would bring a smile to Tony Blair's face. The National Audit Office and the Public Accounts Committee in 1997/98/99 were both very critical of the way this project was carried out, stating that it was "not good value for taxpayers' money".

So, it seems that this is one PPP/PFI the inquiry doesn't want to know about.

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Copyright Ray Shields, 2002.

Most recent revision, 19 May 2002