The committee heard from a number of experts

He was among six expert, financial witnesses who gave evidence to the committee in its inquiry into private finance initiatives and the successor, public-private partnerships.

Mr Davidson cited it as an example of the problems that could arise in the earlier era of public sector investment, where projects were funded directly by the public purse.

'Closer scrutiny'

He refused to tell the media what part of Scotland this happened in or when, beyond saying it was the 1980s.

Mr Davidson told the committee he had found PFI/PPP projects gave "far better" value for money than the traditionally-funded public sector projects he had seen.

He said those involved in PFI/PPP projects looked in far greater detail, and at an earlier stage, at the costs of a project over its entire lifetime.

He said that out of necessity, the details of PFI contracts were exhaustively studied before the project went ahead which meant building times tended to be shorter.

But the committee also heard widely differing views among the witnesses on the advantages and disadvantages of PFI schemes.

'Lower wages'

Philip Grant, head of infrastructure finance at the Bank of Scotland, told MSPs that PFI schemes worked best in areas like hospitals, schools, prisons, court buildings and police stations.

The view that direct public funding is cheaper because public authorities can borrow at lowest interest rates was disputed by Mr Davidson.

He said one study had put the interest rate differential as equating to no more than 3% of the cost of a project over its entire lifetime.

But the view that savings could come from the greater efficiencies of the private sector was challenged by Andy Wynne of the Association of Chartered Certified Accountants in Scotland.

He said efficiency could be "abused" by employers paying lower wages with less attractive pensions than the public sector.