LONDON (Reuters) - The government will approve a Private Finance Initiative scheme to widen and maintain London's M25 motorway despite a jump in the cost of the project, the Times newspaper reported without citing sources.
Under the scheme, the Highways Agency will over the next 30 years pay the consortium chosen to carry out the work 6.2 billion pounds, up from an original estimate of 5 billion pounds, the Times said.
The Connect Plus consortium, comprising engineering firms Balfour Beatty, Atkins, Egis Projects and Skanska, was named as the preferred bidder for the project in July last year.
A spokesperson for the Highways Agency declined to confirm the Times report.
"We're working towards a financial close and we hope to achieve that very soon," the spokesperson said.
The Times said one reason for the cost increase is that banks which have provided Connect Plus with a 925 million pound loan towards its 1.3 billion pound contribution to the project are demanding higher margins.
Under the Private Finance Initiative, private consortiums raise finance to carry out public infrastructure upgrades in return for guaranteed payments from the government over a number of years.
(Reporting by Myles Neligan)