The Government sought an expert to sort out PFI. It found him in the shape of former Linklaters partner Adrian Montague.
Former Linklaters & Paines partner Adrian Montague is a classic City deal maker. Confident, good looking and able to smile with a charming wrinkle of the eyes, he also gives little away and is the sort who drives a hard bargain.
He will need all his City skills in his new job. For he is to be the Treasury's trouble-shooter on the troubled Private Finance Initiative (PFI).
Geoffrey Robinson, the new paymaster general, who is a millionaire businessman as well as a Labour minister, was keen to bring a sharp business mind to the log-jam of difficult PFI projects that had built up under the Conservative administration. Millions of pounds of industry's and taxpayers' money has been wasted on legal and other fees on projects that have yet to get off the ground.
Robinson snapped up Montague in August from his project finance role at merchant bank Dresdner Kleinwort Benson for a £160,000-a-year job as chief executive of the Treasury Private Finance Taskforce.
The appointment came in the wake of a report by Malcolm Bates, chair of Pearl Assurance. He took a hard look at where and why deals had gone wrong and recommended a series of changes, including setting up the Treasury taskforce. It will replace the Conservatives' independent PFI panel and executive which was seen as ineffective in driving deals to a conclusion.
Unlike his predecessors at the panel, Montague will have the power to sign off important PFI deals and will be in charge of accrediting firms and financial advisers to act on PFI projects.
“Nobody in a deal paid much attention to the PFI panel,” said one City project lawyer. “They had no locus, they were not parties to the transaction, so they had no real power to negotiate. This executive, tied in to the Treasury, should be different.”
Montague would probably agree with this, but he is more diplomatic about his predecessors. “The panel did do quite a good job,” he said. “Their role was more to spread the gospel than to do the deals…The task has changed. It is no longer to arouse people's interest but to manage the process to generate a pipeline of good deals.”
Montague and his team of eight “young Turks” as he calls them, appointed from the private sector last week, will not determine policy. That is in the hands of a parallel six-strong Treasury policy taskforce. The team will scrutinise individual deals, identifying commercially and financially realistic ones and helping individual government departments drive them forward.
As for the controversial accreditation of advisers, how that is to be done has not yet been decided, although Montague says he wants an index of individual lawyers as well as firms. He adds: “The message from the private sector is that the firm is less important than the individual within the firm. Both firms and individuals should be accredited.”
Montague's history is distinguished. He earned his first project finance spurs during his 24 years at Linklaters, where in 1986 he acted, as part of a large team, for the lenders to Eurotunnel. He went on to form Linklaters' project group in 1989, advised the government on the British Rail privatisation in 1992 and acted on several large international power project financings.
But he admits that he got restless. “I wanted to fish further upstream,” he says. “I spent a long time doing projects. What happens is that when you get down into the commercial and financial decisions you tend to get more interested in the deals themselves than in the process of delivering them. That is what happened to me.”
So he jumped ship to Kleinwort Benson, as it then was, in October 1995, where he revisited Eurotunnel, advising banks again on its massive £8.7bn debt restructuring. He also became co-head of Dresdner Kleinwort Benson's new project finance unit, bringing the debt arranging and the advisory work into the one unit.
Does he miss the firm where he spent half his life? “No,” he says, without hesitation. “I worked with some remarkable people at KB. You develop a camaraderie wherever you work.”
Nevertheless, he is likely to find working in the public sector radically different to the fast-paced City.
In his drab Victorian office in the Treasury, under the eagle eye of a departmental press officer, he is reluctant to speak about any cultural differences and he dismisses any suggestion that his political masters may not listen to him.
“Bates has already said most of what needs to be done,” he says. “The government is committed to it.”
Going out of the building an official murmured: “He certainly always seems very cheerful.” Will he still be smiling after two years? Industry and the taxpayer await.