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Bond investors not going down the Tube

A Treasury announcement that it intends to underpin a huge swathe of the £4.5 billion PPP debt has been given a lukewarm reception by bond investors still reeling from the Railtrack debacle.

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The UK government is to guarantee practically all of the £4.5 billion that the two private sector consortia awarded the contracts to maintain London Underground’s tracks are intending to borrow. The announcement has prompted accusations that the move makes a mockery of the government’s desire to transfer the risk from the taxpayer to the private sector.

The consortia were awarded the contracts by

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