Paper: Bank Offers Funds for Subway
Nov. 29, 2000
LONDON (AP) _ The European Union's lending institution has offered $1.35 billion in loans to bolster efforts to partially privatize the London subway system, The Guardian reported Wednesday.
Quoting a Monday letter from the European Investment Bank to London Transport Chairman Sir Malcolm Bates, the newspaper said the bank is willing to extend loans of $450 million each to three eventual winners of 30-year contracts to run the subway's track and signaling.
The bank's board has ``agreed to support this public-private partnership project in view of its strategic importance to the improvement of public transportation services in London,'' said the letter, signed by EIB director Thomas Barrett.
The British government's privatization plans for the cash-strapped subway have been sharply criticized by unions and London Mayor Ken Livingstone, a former member of Prime Minister Tony Blair's Labor Party. The plan came under fire again Tuesday in the House of Commons, with Labor and Conservative legislators saying it is running at least a year behind schedule.
Livingstone suggested to The Guardian that the EU loan offer was further evidence against the benefits of privatization, saying ``the whole point'' was to attract private investment to finance improvements.
``But this shows that the private bids (for the three contracts) are based on state-backed loans from the EU,'' he told the newspaper.
The loans would account for about one-third of the $3.75 billion that bidders are expected to raise for the subway.