§ Lord Oakeshott of Seagrove Bay
asked Her Majesty's Government:
When Parliament will see the letter of comfort underwriting 95 per cent of the third party debt to be provided for London Underground, which the Lord McIntosh of Haringey told the House of Lords on 18 March (HL Deb, col. 820) had already been issued; and [HL3422]
What rate of interest they expect to be necessary on the 95 per cent of third party debt to be underwritten by their letter of comfort, referred to by the Lord McIntosh of Haringey in the House of Lords on 18 March (HL Deb, col. 820); and [HL3423]
How long Parliament will have to scrutinise the letter of comfort referred to by the Lord McIntosh of Haringey in the House of Lords on 18 March (HL Deb, col. 820) before binding contracts are entered into with the providers of third party debt for the London Underground Public Private Partnership. [HL3424]
§ Lord Falconer of Thoroton
My right honourable Friend the Secretary of State is considering issuing comfort letters in relation to the Tube modernisation contracts, but has not yet done so. Drafts of these letters, which are not intended to create binding obligations and do not underwrite 95 per cent of third party debt, have been discussed with bidders. They were laid before Parliament on 20 March 2002 using the Minute procedure.
Precise finance terms for the third party debt raised under the PPP contracts are still to be finalised. To estimate at this stage what rate of interest the private sector infrastructure companies pay on the debt they raise would undermine London Underground's commerical position and jeopardise its ability to deliver best value.