This is ridiculous. The world is queueing up to give the government money at the lowest possible interest rates. Every government bond issue is over-subscribed. There is then no shortage of funds to build this hospital with much cheaper funds than those the government is seeking. It is purely dogma in that case that is preventing this hospital being built. But whilst the FT recognises the possibility that the government could fund this project directly, it does not point out that this would, very obviously, be the cheapest option available.
Nor does it point out that if things are so dire but this hospital is really needed then People’s QE could be used to fund it. People’s QE was always intended as a backstop for the time that the market failed. The market has failed here. In that case it is just time to get on and use the viable alternatives to get this hospital built. That is the message that needs to be sent to politicians. The time for fighting around with incredibly expensive market alternatives has come to an end. It is public and not private finance that has to build our infrastructure now.
The problem isn’t in gaining debt finance to finish the hospital. It’s in having an equity investor who will carry the risk of over runs.
You know, the over runs on this particular project which so wondrously contributed to Carillion’s demise? The risks of which are why People’s QE isn’t a solution. Because QE doesn’t produce that equity investor carrying the risk, does it?
Jeebus, how can a damn accountant wibble on about this without getting equity and risk?