The murky world of public-private deals

I SHARE Coun Cath Davis’s concerns around contracts awarded under a cloak of secrecy provided by exceptions to the Freedom of Information Act. Along with others, I was denied information regarding the remortgaging of our local airport in the Blair era. A virtually debt-free municipal airport had been forced into a contrived semi-privatisation as a condition for government agreement to further development of the airport facilities.

Newcastle Airport then became managed by a private company – Copenhagen Airport. Copenhagen was taken over by an Australian company who, within six months, cajoled the local authority membercontrolled ultimate holding body here to borrow more than £300m to finance a large dividend payment to all concerned, including our seven local authority shareholders. The canny Australians walked off a few years later having pocketed almost £40m that had been borrowed against the security of the airport asset.

These deals are all part of a picture in which local and national government bodies are suckered by crafty privatesector groups.

The result is hospital and school Private Finance Initiative contracts that tie the hands of the public body and lead to usurious charges over prolonged periods as the contractor has a monopoly on simple maintenance tasks: a licence to print money when changing a light bulb can cost £35.

Unfortunately, those in the public sector responsible for making these deals are to be found in all political colours, and all content to hide behind the cloak of ‘commercial sensitivity’ to avoid scrutiny of their part in the deals. ALAN FIDLER, North Shields