Written question asked by Bernard Jenkin (Conservative) on Wednesday, 2 May 2001, in the House of Commons. It was due for an answer on Thursday, 10 May 2001. It was answered by Keith Hill (Labour) on Thursday, 10 May 2001 on behalf of the Department of the Environment, Transport and the Regions.

Dept of the Environment Transport and the Regions

Question: To ask the Secretary of State for the Environment, Transport and the Regions, how the principle of reputational externalities is applied to the assessment of bidders for the London Underground PPP. - (Holding answer 9 May 2001).

Answer: Mr. Jenkin: To ask the Secretary of State for the Environment, Transport and the Regions how the principle of reputational externalities is applied to the assessment of bidders for the London Underground PPP. [160530] Mr. Hill: [holding answer 9 May 2001]: In recognition of the size of the London Underground PPPs and the potential for alternative funding sources, the financial analysis of the PPP bids is based around a number of different scenarios, including ones that allow for a public sector bond-financed London Underground. Where appropriate, an adjustment representing the "reputational externality" is included in some of these scenarios. This is designed to capture the impact additional public sector borrowing would have on the Government's reputation for prudence and therefore on the risk premium demanded on sterling-denominated securities.

Secondary information

Type: Written question
Reference: 368 c255W; 160530
Session: 2000-01
Subjects: Finance London Underground Public private partnerships Underground railways
Link: View this Written question on www.publications.parliament.uk