Utility sale 'could fund bridge'

CBI Scotland has criticised government plans for funding the new bridge

Scottish Water should be sold off to fund the new Forth road bridge, according to CBI Scotland.

The suggestion came after parties clashed over how to fund the crossing during a Holyrood debate last week.

The SNP's plan to fund the £2bn bridge out of normal government expenditure over 20 years, instead of three, was later backed in a 121-2 vote.

CBI Scotland Director Iain McMillan said this would be unacceptable and his plan would solve a "funding headache".

Mr McMillan is to tell a transport conference in Edinburgh on Monday that selling or mutualising Scottish Water would enable more investment in water infrastructure, while freeing up £182m a year of Holyrood spending.

This cash could then help build the replacement bridge by a Private Finance Initiative (PFI/PPP), he will argue.

I would urge the Scottish Government very strongly to reconsider their approach to funding as a matter of urgency Iain McMillan CBI Scotland

However, a spokesman for Finance Secretary John Swinney expressed surprise at CBI Scotland's proposals, since "Treasury rules explicitly state that the UK Government has the right to hold onto any money raised in this way".

The Scottish Government has also ruled out a PFI scheme.

Earlier this month, Chancellor Alistair Darling rejected SNP calls for money from future budgets to pay for the bridge.

The SNP administration now says the toll-free bridge can be constructed using traditional public procurement methods.

Project delays

There are concerns that this payback scheme may not be agreed by the UK Treasury, and opposition parties have claimed it would have a knock-on effect, delaying other major public construction projects.

CBI Scotland Director Iain McMillan will tell conference delegates that his idea would solve both these issues.

He will say: "I would urge the Scottish Government very strongly to reconsider their approach to funding as a matter of urgency.

"The current situation is not delivering what business and our economy needs and is unacceptable."

Under the SNP, the bridge will be built on-time and on-budget Spokesman for Finance Secretary John Swinney

However, Mr Swinney's spokesman said the parliamentary vote had vindicated their approach for funding the bridge.

He added: "PFI is a non-starter because of the double whammy to the public purse of the full cost coming off our capital budget in a single year, and then payments having to be made over 30 years.

"And tolls have been resoundingly rejected by virtually the whole parliament.

"Under the SNP, the bridge will be built on-time and on-budget.

"Traditional procurement is the most cost-effective option, and there is no credible argument against enabling us to phase the payments over a longer period."

CBI Scotland has supported the idea of making Scottish Water a mutual company for a number of years.

The idea has been backed by both the Conservatives and Liberal Democrats.

However, Unison, the largest union representing water and sewage workers, claims mutualisation was a smokescreen for privatisation.