| In order to strengthen significantly the partnership between the public and private sector, the Government will look to act as a minority equity co-investor in future projects. In particular, an approach of public sector co-investment will mean that: • objectives will be more closely aligned, ensuring a collaborative approach by both the private and public sector to improving project performance and managing risk; • a more genuine partnership environment will be created, allowing for a better understanding of perspectives between the public and private sectors; • there will be improved project transparency, including in relation to the financial performance of the project company, as the public sector will have access to more information through its board membership; and • value for money will be improved as the public sector will share in the ongoing investment returns, reducing the overall cost of projects to the public sector. To ensure an effective role is played by the public sector as an equity investor and one that minimises the potential for conflicts of interest between the public sector acting as an investor and a procurer, the equity investment: • will be managed by a commercially focused central unit in the Treasury, separate from the procuring authority; • will be managed by individuals with the appropriate professional skills to oversee the investment and make commercial decisions; and • will be made on a same-terms basis with the private sector. In addition, the Government will introduce an equity funding competition after the preferred bidder stage for a portion of the private sector equity to widen the sources of equity finance and, in particular, to attract long-term investors into projects at an earlier stage. |