Government to ask Tynwald for permission to borrow £ 400million

Cannan says this move will lay a “solid foundation” for the next government ”

The Treasury Minister is expected to ask Tynwald later this month for permission to borrow £ 400million.

If approved, the money will be used to refinance around £ 260million of internal debt owed to the government by Steam Packet and Manx Utilities.

£ 80million would be paid to the ferry company for the new ship ‘the Manxman’ – the remaining funds would be available for capital spending on health, climate change and infrastructure.

Alfred Cannan says market conditions like low interest rates mean it might be cheaper to borrow rather than draw on reserves.

The £ 200-250million impact of Covid-19 on the Manx economy is also a factor behind the financial motion for Tynwald.

Mr Cannan warned that “terms may not be there” for similar borrowing in six months with lower interest rates, an attractive draw.

It is understood that the Treasury considers the sterling bond market “probably the most liquid”.

External advisers have been selected to assist the government in the process with any borrowing estimated to last “up to forty years”.

Internal debts to be refinanced include £ 178 million owed by Manx Utilities for infrastructure.

Mr Cannan said “no cost will be passed on to customers and the authority’s financial plans will not be disrupted.”

When the Steam Packet was purchased in 2018 it was loaned for £ 76million which will now be refinanced as part of the proposal.

Despite the proposed loan and refinancing, the two public companies will continue to repay the treasury.

Mr. Cannan spoke with Ewan Gawne:


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