Bank of Scotland poaches PFI team in wake of RBS London move

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BANK of Scotland has poached a team of senior project finance specialists from the Royal Bank of Scotland in the wake of RBS's decision to shut down its private finance initiative unit in Edinburgh and transfer operations to London.

Three RBS PFI specialists have agreed to join BoS's joint ventures team in Edinburgh, and the Bank believes further defections could follow.

The defectors may also support BoS's own Edinburgh-based PFI team. A bank spokesman said: "These people will be able to hit the ground running and help expand our offering."

The move is a coup for John Moran, head of joint ventures at BoS, who leads a 70-strong team in Edinburgh and London, supporting house builders, hotels, leisure companies and commercial property deals.

Last month, Scotland on Sunday revealed RBS was shutting its PFI operation in Scotland despite funding a high-profile series of projects including Edinburgh Royal Infirmary. RBS said concentrating PFI expertise in London would allow it to "optimise its operations".

An RBS spokesman said last night: "We remain committed to funding PFI programmes in Scotland, but have decided to base the UK team in London."

RBS's move prompted concern at the Scottish Executive, which has worked with the former PFI team in the past. Jeff Thornton, the former head of RBS's private finance operation in Edinburgh, is not thought to be among the defectors.

PFI deals, also known as public-private partnerships, enable public agencies to build hospitals, schools and other facilities for a lower up-front cost than if they were paid for purely out of the public purse. But some politicians claim the long-term costs can be higher.

The BoS spokesman said: "We want to take part in building Scotland's infrastructure to show that we are concerned about the social fabric of the country. If other ways of providing private finance come up in the future, we would take a look at that."

The HBOS subsidiary works with construction companies such as Balfour Beatty in the UK, the world's most advanced market for PFI projects. It has also backed public-private projects in Australia and France.

Most notably, it took a 250m share in one of Australia's biggest PFI schemes - a road-toll project around Melbourne city centre backed by local PFI boss Guy Dillon, who previously worked for BoS's project finance team in Edinburgh.