Tuesday, December 4, 2012

UK to overhaul infrastructure contracts, seek savings

LONDON (Reuters) - Chancellor George Osborne will overhaul the way the government handles infrastructure procurement on Wednesday, a source familiar with the matter said on Tuesday, and announce large savings on existing contracts.

Osborne, under pressure to boost Britain's flagging economy when he updates his economic forecasts on Wednesday, will demand that the taxpayer has a board seat and a share in the profits of companies taking on public-private infrastructure contracts.

He will also consider introducing competitions where investors can bid for stakes in projects already underway.

Under pressure to find savings to get the Conservative-Liberal Democrat coalition government's austerity plan back on track, Osborne will say he has found 1.5 billion pounds in savings from about 100 existing contracts in the last 18 months.

A further 1 billion pounds in efficiencies have been identified, the source said, but gave no details of the time frame for the savings.

Osborne could face higher government borrowing this year, a major embarrassment for the Conservatives, who have put cutting a record budget deficit at the heart of their economic policy.

A sluggish economy has played havoc with the government's austerity targets since 2010 meaning Osborne may have to announce further spending cuts or a longer period of fiscal consolidation.

(Reporting by Matt Falloon)

Source: http://news.yahoo.com/uk-overhaul-infrastructure-contracts-seek-savings-000633639--sector.html

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