PFI was used by the Labour government to rebuild Britain's schools, hospitals and roads, but was attacked by its many critics as privatisation by stealth. Infrastructure UK, the Treasury body, is currently poring through 150 responses to a consultation that would see what is colloquially known as "PFI mark II" introduced.
But, it is understood that its chief executive, former Alistair Darling adviser Geoffrey Spence, has settled on at least two major changes. These are expected to be sketched out at a conference of public and private sector parties, such as NHS trusts and construction companies, in September.
The Government wants pension funds to finance a large chunk of a £200bn infrastructure programme that ministers hope will kick-start the economy.
However, pension funds have historically been unwilling to put equity into the construction phase of such projects, as it is deemed risky with a very high chance of litigation between client and builder.
Infrastructure UK would look to stimulate this early investment in the next PFI round by allowing pension funds to inject debt as well as equity into the projects. PFI schemes were often 90:10 debt-to-equity, with the banks getting their money back first when the public sector repaid the cost of building and running the property over a 25 to 35-year contract.
By putting up debt, pension funds would see most of their money almost guaranteed to be repaid, making the investment less of a risk. The equity owner can be penalised if the asset misses certain targets, as rudimentary as receptionists failing to answer the phone quickly enough.
An industry source said: "The problem for pension funds has been that the first pound is always repaid, but the last pound – the equity – is the least likely to be repaid. A debt position is a better position to have."
A major criticism of the PFI has been that the public sector has not shared in any of the profit made when the private sector equity holder, often a builder or support services group initially, sell on their stake. The public sector could now take about 50 per cent of the profit from these sales, which in PFIs currently under negotiation alone could be worth £1.5bn to £2bn.
Race for Finance Minister: After Pranab, who next? - MoneyControl.com
The race to Rashtrapati Bhawan may be over but the hunt has now begun to find a replacement for Pranab Mukherjee in the Finance Ministry. But what is corporate India's expectation from the new minister in this crucial portfolio?
The corporate India is looking forward to a reformer in the North Block. Former Infosys director Mohandas Pai said, "Corporate sector is disappointed with the Finance Minister's Budget which sends back to the pre-reforms days. India Inc is relieved and hoping for a finance minister who will be much more open, transparent and growth oriented."
But who will be that person? The spin-doctor of 1991 Dr Manmohan Singh, the Prime Minister himself, is likely to hold the portfolio temporarily and sneak in some changes he wants.
The other options for the post are:
Jairam Ramesh, 58, Rural Development Minister: An economist, the MIT graduate is seen as close to the Gandhi family. He was one of the backroom players who shepherded the Congress party's election campaigns in 2004 and 2009.
Articulate and media savvy, Ramesh supports cutting fuel subsidies and opening up the supermarket industry, which he opposed earlier.
In a recent interview with a local business daily, he said time for "pussyfooting" on major economic reforms was over and the government needed to "take the bull by its horns".
To his advantage, Ramesh is able to build rapport with alliance partners as well as opposition parties. At a time when the government has been left hamstrung by unruly allies, Sonia Gandhi could settle for a person who can bring partners on board to push divisive reforms needed to revive the economy.
However, he carries an image of being anti-development. As an environment minister, he had red-flagged several mining and infrastructure projects on environmental concerns.
P Chidambaram, 66, Home Minister: A familiar face and a senior party stalwart who held the post during the global financial crisis in 2008.
His deft handling of the situation then, helping India avoid the worst of the downturn, makes him a leading candidate to take over an economy mired in the doldrums.
Although it's been nearly four years since he moved over to the interior ministry, his heart is seen to be in his previous job. Former colleagues from the finance ministry recall him as having an eye for detail and cannot be bluffed.
Considered to be a reform-oriented taskmaster and a market friendly face, Chidambaram enjoys the confidence of both Prime Minister Singh and Sonia Gandhi.
But an image of "intellectual arrogance" has earned him detractors both within and outside the party.
He is also under siege. Opposition parties question his role in a multi-billion dollar telecoms scam that has undermined the Congress-led government. His family is under scrutiny over a controversial telecom deal. Chidambaram, himself, is battling charges of rigging his election to parliament in 2009.
C Rangarajan, 80, Chairman of the Economic Advisory Council to the Prime Minister: Seen as a dark horse in the running for finance minister, he is one of the most trusted aides of Prime Minister Singh.
Rangarajan has worn various hats both within and outside the government, and would bring long experience to the job. Unlike other contenders, he has generally avoided controversy.
He is widely perceived as a hawk who frowns upon expansionary fiscal policy and high inflation, and is an advocate for fuel subsidy reforms and long-pending financial sector reforms. He favours building consensus before allowing foreign investment in multi-brand retail and aviation.
However, Rangarajan is not seen as a political heavyweight, even though he was governor of Andhra Pradesh for six years and was a member of the Rajya Sabha. Congress is seen to prefer a politician who can deliver votes in the 2014 parliamentary elections.
Montek Singh Ahluwalia, 68, Deputy Chairman, Planning Commission: The Oxford-trained economist has been a key figure in Indian economic policy since the mid-1980s. He is an influential adviser to the prime minister and is also India's Sherpa for the G20 Summit.
A supporter of open markets, he has been pushing the government to implement long-pending reforms like ending controls on fuel prices, lifting caps on foreign stakes in the insurance sector and allowing in foreign supermarkets.
He is close to Singh and was a key member of the team that navigated the economy out of the 1991 balance of payment crisis.
Ahluwalia is said to harbour political ambitions and was seen as front-runner for finance minister in 2009, but was thought by Congress to be too market friendly. A lack of political base also went against him.
He has also been hurt by controversies, including the definition of a poverty line at 32 rupees a day.
Anand Sharma, 59, Trade Minister: A lawyer-turned politician, Sharma is perceived to be reform-oriented and enjoys the confidence of the Gandhi family.
He is credited with arresting the slide in India's exports after taking over as trade minister in 2009 through a combination of bilateral trade agreements and diversification of export markets. He has also overseen bold steps to liberalise trade ties with arch-rival Pakistan.
Sharma has been pushing for liberalising foreign direct investment rules and succeeded in getting the government's approval for allowing foreign direct investment (FDI) in multi-brand retail, an initiative thwarted by coalition allies. Permitting FDI in the aviation sector is the next big ticket item on his agenda.
Sharma's stature in the party could be a handicap. He is not seen as a political operator and does not bring a large base of political support. Blame for the embarrassing flip-flop on FDI in retail is often put at his doorstep.
The challenge is immediate and daunting. How to restore India's economic growth miracles, the omens are not good, a farewell to incredible India could also mean a farewell to the party in power.
(With inputs from Reuters)
India's finance minister nomindated for presidency - india.nydailynews.com
June 16--NEW DELHI (The Statesman/ANN) -- The 77-year-old Congress leader from West Bengal and Union finance minister Pranab Mukherjee was yesterday nominated by the ruling Congress-led United Progressiv Alliance (UPA) as its candidate for the July 19 election to the post of the President of India.
The Trinamul supremo and West Bengal chief minister Miss Mamata Banerjee thus appeared to have been isolated as her fledgling alignment with Yadav collapsed barely 48 hours after Yadav and Miss Banerjee, while ignoring the suggested candidature of Mukherjee or Vice-President Hamid Ansari, jointly went public with their own preferred list of three other nominees -- including ex-President A P J Abdul Kalam, Prime Minister Manmohan Singh and the former Lok Sabha Speaker, Somnath Chatterjee -- for the President's post.
With a question mark hanging over the continuance of the Trinamul in the ruling alliance, an unfazed Miss Banerjee skipped the meeting of the UPA allies at the PM's residence late this afternoon, and instead flew back to Kolkata where she stuck to her pitch for Kalam as the Presidential candidate despite having been ambushed by the Samajwadi Part (SP). It was another matter that Kalam's own willingness to contest the Presidential election amid a clear lack of consensus over his candidature remained uncertain.
On his part, soon after his candidature was announced by the UPA chairperson, Sonia Gandhi, Mukherjee, while appealing to all political parties to support his nomination, also sought the Trinamul chief's support. "I also seek the support of Mamata Banerjee because she is like my sister... a valued colleague," Mukherjee told reporters.
At the meeting of the UPA constituent parties, Gandhi proposed Mukherjee's candidature for the country's highest post, which was unanimously approved by the allies, barring the absent Miss Banerjee.
Reading out from a statement, Gandhi said Mukherjee has had a long and distinguished record of public service spanning over five decades. "There is broad support for his candidature. The UPA appeals to all the political parties and all MPs and MLAs to support the candidature of Mukherjee for the office of President."
Within moments of the announcement, the SP welcomed Mukherjee's candidature and declared its support. Mulayam's brother and senior SP leader, Ramgopal Yadav, said, "I am very happy that Pranabda has been finally nominated for the candidate for the highest office. The party supports him and wishes him well." Another supporting ally, Miss Mayawati, pledged her party's backing for Mukherjee, saying he is the "most serious and deserving candidate" of all those announced. Later, Mulayam told reporters in Lucknow: "Pranabda is experienced, honest, intelligent and a capable person. We support him." Asked whether the SP would join the UPA government if the Trinamul quits the ruling alliance, he said: "It's an absurd question... Who has invited us (to join the UPA)?" Mukherjee expressed his gratitude to Gandhi and UPA leaders for the honour, accepting it with "all humility".
The PM swiftly started working his phones, reaching out to leaders of all parties to drum up support for Mukherjee. After speaking to the SP chief and Miss Mayawati, Singh also called up top leaders of the principal Opposition party, the Bharatiya Janata Party, including L K Advani, Nitin Gadkari and Sushma Swaraj, and also the Left in this regard.
The BJP-led National Democratic Alliance had met here earlier in the day, but chose to defer their decision over the Presidential poll amid reports that the Janata Dal (United) had expressed reservations over supporting Kalam at the meeting. The Left parties are going to take their call at their June 21 meeting, but there were indications that they might also back Mukherjee's candidature.
Mukherjee is expected to file his nomination papers following the PM's return here on 23 June from his Mexico-Brazil visit beginning tomorrow. Before doing that, he will resign as the finance minister. The principal crisis-manager of the Congress and the UPA government, Mukherjee is also the Leader of the House in the Lok Sabha.
The PM is expected to keep the finance portfolio with himself initially at a time when the country is reeling under a severe economic crisis. Among the Congress leaders whose names were doing the rounds for the office of the Leader of the House were home minister P Chidambaram, urban development minister Kamal Nath and power minister Sushilkumar Shinde.
Forex currency trading - pressbox.co.uk
Added: (Sat Jun 16 2012)
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Submitted by:Andrei Ionescu Find out more.Cartel money laundering cases tough but critical - Miami Herald
McALLEN, Texas -- When it comes to arresting drug traffickers and dismantling organized crime, the investigation into a U.S. horse racing operation allegedly laundering money for one of Mexico's most powerful cartels is rare - and difficult to prosecute.
Unlike most drug busts, the backbone of sophisticated money laundering cases is a complicated trail of paper - reams of bank, tax and property records - that usually take years to track. But hitting organized crime where it hurts the most - the money flow - is the most effective way to shut the crime networks down, investigators say.
"The money is much more valuable to the trafficker than the drugs are," said John Kirby, a former federal prosecutor in San Diego, who worked on money laundering cases against the Arellano-Felix cartel, among others. "If you want to hurt these guys that's how you do it, because that's the end product. That's what they really want. And if you can try to take that away, then you're really having an impact."
During his 10 years in the U.S. Attorney's office, Kirby said he prosecuted hundreds of drug traffickers. "I had eight good money laundering cases. They're just hard."
Chasing organized crime's money flow isn't a new tactic. The same racketeering laws being used against Mexican cartels today are the ones that targeted the mafia in the 1970s. Money laundering was spelled out as a federal crime with a 20-year maximum sentence per count in 1986 as law enforcement officials increasingly recognized that just seizing the drugs wasn't enough to bring down traffickers.
In this latest case, federal agents raided an Oklahoma ranch, a New Mexico quarter horse race track and sites in Texas on Tuesday, alleging a brother of a leader in the Zetas drug cartel was using a horse-breeding operation to launder money. Millions of dollars went through the operation, which bought, trained, bred and raced quarter horses throughout the southwest United States, the indictment says.
Eight people were arrested, including Jose Trevino Morales and his wife in Oklahoma. Two of his brothers and four others remain at large.
"That case will be a model, a blueprint for a long time to come of how we need to take on these 21st-century criminal techniques," said Douglas Leff, who was chief of the FBI's Asset Forfeiture and Money Laundering Unit before recently returning to New York. He expects more cases because of a 2010 Mexican banking law that makes it difficult to deposit U.S. dollars into accounts across the border. That means cartels will do more money laundering in the U.S., he says.
"If we can follow the money successfully, that's going to be the avenue that leads us to the top of the food chain rather than somebody who's just a trusted manager," said Leff, who spent some time on the case while at headquarters.
The government's investigation into the horse operation began in January 2010 with a tip from an informant in Mexico that two Trevinos at the top of the Zetas organization were the real buyers behind two quarter horses that sold for more than $1.1 million at an auction in Oklahoma City, according to court records. The IRS had its own investigation of Jose Trevino, and the investigations merged in February 2011.
Usually the drug cash was smuggled back into Mexico and run through currency exchanges for an initial rinsing. Then the Trevino brothers recruited Mexican businessmen to wire payment or write checks for horses bought in the U.S. to make the transactions appear legitimate. They would reimburse them in cash. At other times, workers for the Zetas' Dallas cocaine distributor passed drug cash directly to Jose Trevino - at least once at a Wal-Mart outside Dallas - cutting out the return trip to Mexico, court records say.
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