Does the accompanying text make any sense? I doubt it:
SFT has always been conceived as being representative of the whole public sector, and, if it is to deliver its efficiency potential, it has long been recognised that this original ambition must be crystallised in SFT's governance.
There is however always a balance to be struck between appropriate representation and governance, and effective management.
For the immediate next phase SFT will be moved forward more efficiently under direct oversight of Scottish Ministers. However, once its more detailed business case is confirmed, it could be overseen by an Infrastructure Board for Scotland, possibly made up of senior representatives from across the public sector and chaired by the Cabinet Secretary. The purpose of the IBfS would be to oversee SFT delivering its strategic objectives, and to input to the future strategic direction of SFT.
SFT Finance and Investment will be a separate private sector classified entity in which SFT D&D has a minority share. Careful structuring of the constitutional documents will be required for this entity to ensure the public sector can exert appropriate influence whilst not undermining its private sector classification. Its potential organisational form has not been assessed in detail, although the flexibility and transparency of a Limited Liability Partnership ( LLP) structure is initially attractive. It is anticipated that it is likely to fall to be regulated by the FSA. It will have its own management team who will report to the LLP members committee.
The details of how investment will be raised from the private sector has not been explored in any detail as part of this SBC.
So one part of this company will be a public sector entity while another part will be a private sector entity? How is that going to work exactly? And the last sentence of the above quotation rather gives the game away.
Incidentally, it may be all very well for local authorities to issue bonds (although why they would wish to do so when it is cheaper to borrow from the Public Works Loan Board is another mystery), but it will not enable them to escape public expenditure controls (which apply to capital investment rather than capital financing).