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24Feb94 UK: CUT RED TAPE - LABOUR - FINANCING OF INFRASTRUCTURE.

The Labour Party this week urged the scrapping of Treasury red tape, which it claims has hamstrung the development of privately-financed infrastructure.Shadow employment secretary John Prescott said the Government's private finance initiative had failed.He said 96 projects had been identified for possible partnerships, but just 12 were under construction, while 11 pre-dated the initiative and 43 were only proposals. Most were worth less than £5 million each.The Treasury insists that when most of a project's financial risk lies with the public sector, the entire cost should be added to the public sector borrowing requirement. This rule has thwarted many partnership projects.But Mr Prescott said other European states separated market activity like construction funding from central Government services.Labour wants a task force of financial and construction experts to draw up new rules for financing partnerships. These would be made public, and applied to all projects. CONSTRUCTION NEWS