Railtrack (Hansard, 11 December 2001)

§ Mrs. May
To ask the Chancellor of the Exchequer what advice the Treasury has received from the office for national statistics on the treatment of Government loans to Railtrack while in administration in the national accounts. [22065]

§ Ruth Kelly
The information requested falls within the responsibility of the National Statistician. I have asked him to reply.
Letter from Len Cook to Mrs. Theresa May, dated 10 December 2001: As National Statistician I have been asked to reply to your recent question on what advice the Treasury has received from the Office for National Statistics on the treatment of government loans to Railtrack while in administration in the national accounts (22065). 761W The Treasury did not seek advice on the national accounts treatment of these loans and the Office for National Statistics (ONS) did not provide any. Once ONS had decided on the national accounts classification of Railtrack while in administration, the classification of government loans to it is straightforward. These are classified as central government loans to the private non-financial corporations sector. This treatment has been reflected in the National Statistics public sector finances release, which is based on national accounts definitions and jointly published by ONS and the Treasury.

§ Mr. Bercow
To ask the Chancellor of the Exchequer what assessment has been made of the effect on risk premium which will have to be budgeted for in future partnerships with the private sector, following the events surrounding Railtrack going into administration. [8445]

§ Mr. Andrew Smith
We do not anticipate that there will be any long-term impact on the risk premium for PPPs as a result of Railtrack administration. In its report of 23 October, credit rating agency Standard and Poors saidthe Railtrack situation has no direct credit implications for rated PFI projects".
PPPs are fundamentally different from the regime under which Railtrack operated. Whereas PPPs involve output focused bilateral contracts which provide a clear allocation of risks, Railtrack was privatised under a broadly standard utility-style regulatory structure; although, unlike any other privatised utility, some two thirds of its revenue came from Government.