Future of PFI uncertain after demise of Railtrack

Companies involved in private finance initiative (PFI) schemes are in a much worse position after the demise of Railtrack, according to Mark Costar, director at JO Hambro. Risk profiles have increased, the visibility of earnings has reduced and he anticipates a significant rerating of such stocks. The key issue is the perception that the Government may not be prepared to stand the cost of financing schemes. However, Robert Moss, manager of the Invesco Perpetual UK Core Fund, argues that projects will still need to be completed and says that those companies that are diversified in a...