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Last Updated: Feb 18th, 2008 - 14:39:01 |
(Independent News and Media) - Fears have been raised about the appropriateness of allowing one of the Government's advisers, Sir Adrian Montague, to lead a bid for the company that runs the £5.2bn Channel Tunnel Rail Link.
Sir Adrian is generally regarded as the Chancellor's favourite private finance adviser and former consultant to the Treasury.
Any private bid for London & Continental Railways is likely to be controversial because of the billions of pounds backing it has received from the state, but yesterday opposition politicians and union leaders united to express particular concern about Sir Adrian's involvement, which emerged earlier this week. Apart from his close links with the Treasury, he is a former deputy chairman of the state-backed Network Rail and chairs the company co-owned by Transport for London and the Department for Transport which is developing the Crossrail project, the proposed east-west rail link across London.
The Secretary of State for Transport, Alistair Darling, who revealed on Tuesday that there had been an approach by an unnamed bidder, will have to give his consent to any change of ownership because of the degree to which the company depends on public money. It enjoys more than £3.75bn of bond finance under-written by the Treasury and £1.6bn of debt, which is in effect a state subsidy.
The company's present shareholders include Bechtel, the US construction group, and the City bank UBS, which each hold stakes of 22.5 per cent. National Express, the train and coach operator, has 20 per cent, while SNCF, the French state railway, and EDF, the electricity giant, have 13 per cent each.
Chris Grayling, the Tory transport spokesman, said of the bid, which will be financed by Goldman Sachs: "If the Government is going to take the decision to fully privatise the Channel Tunnel Rail Link, then they should make sure it is a proper open process, giving anybody who might be interested a chance to bid.
"What can't happen is the Government taking a decision to hand the route over to a consortium which has got very direct personal links with ministers."
Tom Brake, the Liberal Democrat transport spokesman, said: "He's very close to the Government and it is essential therefore that effective Chinese walls are in place to safeguard the Government's financial interests in London & Continental.
"This has not got off to a good start with Darling's written statement referring opaquely to a third-party approach which it was subsequently revealed was an approach by Sir Adrian."
Bob Crow, the leader of RMT, the industry's largest union, said:"The last thing we need to see is yet more public money ending up subsidising the profits of the Government's big-business mates. If the proposed buyout does not include provision for repaying every penny of the £3.7bn of public money shoring the company up we will be entitled to ask what is going on. The closeness of Adrian Montague to the Government has raised fears that this is in effect already a done deal."
Sir Adrian declined to comment, but he is known to believe that the announcement by Mr Darling opened the way for any other bidder. It is understood talks are at an early stage and that no offer has yet been tabled.
Keith Norman, the general secretary of the train drivers' union Aslef, said: "If ministers are determined to sell the company, this looks like a dubious option for the public."
Concern has also been expressed about the involvement of James Warldaw as a key player in Sir Adrian's bid team. He was an adviser at the Treasury until last May. The Treasury denied there was a conflict of interest in either case. Mr Warldaw had followed Cabinet Office advice to the letter. Sir Adrian no longer had a formal role at the Treasury having left the Private Finance Initiative taskforce more than five years ago.
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