Forgemasters' chairman hopeful that loan package will go ahead

THE chairman of Sheffield Forgemasters yesterday declared that he was "hopeful" the new coalition government would back Lord Mandelson's loan package announced before the general election.

The former business secretary promised an 80m loan to help pay for a new forging press which will place the company at the top of the 40bn supply chain for the new wave of nuclear power stations.

The company spent two years putting together the funding package, which includes a mix of 40m in forward orders from Westinghouse, the US nuclear reactor provider, bank debt and some private equity.

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Those plans have now been placed in jeopardy by the coalition government's commitment to review all spending decisions taken since January 1 amid claims that Lord Mandelson had used taxpayers' money to boost Labour's election chances.

Tony Pedder, the chairman of Forgemasters, told the Yorkshire Post he was hopeful the Lib-Con administration would see the loan as "robust and offering good value". "I'm realistic," he said. "The Government has a duty to review. It's good governance in a way."

Mr Pedder added: "Fingers crossed they come to the right decision and quickly. We don't want this dragging on with a lot of uncertainty. Without that loan it would be very hard to access private money for a company of our size and a project like this."

He said the loan will be repaid and generate extra benefits through extra jobs and "the boost it will give to the economy regionally and nationally".

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A spokeswoman for the Department for Business, Innovation and Skills said: "Government has said it is reviewing all the spending commitments made from January 1 so it is being looked at at the moment. No decision has been made."

Ken Clarke, the new Lord Chancellor, told the Yorkshire Post last month that a Conservative government would have to study business plans and question the need for taxpayer support before deciding whether Lord Mandelson's various spending decisions were warranted.