星空传媒

The government's 拢1.45bn housing private finance initiative finally got off the ground this week when the first pathfinder contract was signed in Manchester after three-and-a-half years of negotiations.

The 拢90m Plymouth Grove scheme in Manchester was finalised and work is due to start on site as early as Monday.

A source close to the deal said: "People were talking through the night last Monday to iron out the details. But everyone's excited now that it's the first one that's come through, as it has been a long and arduous process."

A consortium involving lender Nationwide, Gleeson Regeneration and Harvest Housing Group will run the 30-year contract. Harvest will manage 663 of the 1000 properties on behalf of the council, which will run the rest itself.

Derek Martin, assistant director of housing at Manchester council, said the city still had a head start on other PFI projects. "We had already discussed a possible stock transfer, but then the ODPM announced housing PFI," he said. "We had a project team in place that had been looking at ways of meeting the decent homes standard, so that helped a lot."

The 拢90m scheme will be financed up front by Nationwide, which will receive government payments totalling 拢40m over the next 30 years.

Gleeson will demolish 436 homes during a three-year period and, in their place, build 400 to 500 for private sale.

The Office of the Deputy Prime Minister sees the PFI process as one of the three principal planks of policy to deliver the 2010 decent homes standard.

However, those involved in the Plymouth Grove deal highlighted significant stumbling blocks.

Gavin Mackinlay, chief manager of project finance at Nationwide, said: "We've had to get our way round lots of housing issues that weren't designed for PFI, such as best value inspections." Another problem had been the adaptation of section 27 of the Housing Act to allow the council to subcontract work to a housing association.