Defence written question – answered at on 5 March 2009.
To ask the Secretary of State for Defence what private finance initiatives have been entered into by his Department since 1997, indicating in each case (a) the total value of each contract, (b) the name of the contractor and (c) whether each contract has been subject to refinancing arrangements; what the monetary value of the refinancing arrangement was in each such case; and what the extent of the claw back has been.
Information on the capital value and estimated revenue payments for the lifetime of each private finance contract as well as the primary contractors (equity stakeholders in the project companies) are recorded centrally on the Treasury's website at:
http://www.hm-treasury.gov.uk/ppp_pfi_stats.htm
Since November 2000, it has been the MOD's policy, in common with other government departments, that all Private Finance Initiative (PFI) contracts and those Public Private Partnership contracts involving the use of private finance must contain legally binding conditions whereby any gains from refinancing are shared with the MOD on a 50:50 basis. For contracts signed before November 2000, the right to share a refinancing gain is governed by a code of conduct agreed with industry.
PFI projects that have been the subject of a refinancing agreement together with details of the value and the extent of the claw back to the MOD in each case are shown in the following table:
Project Name | Date r efinanced | Refinancing s hare (Percentage) | MOD share of refinancing g ain (£ m illion) |
Joint Services Command and Staff College | June 2002 | 30 | 0.38 |
Central Scotland Family Quarters—Bannockburn | June 2003 | 30 | 1.82 |
Medium Support Helicopter | December 2004 | (1)28 | 1.35 |
VLF Fleet Communications (MOD project) | December 2006 | 30 | 1.62 |
Tornado GR4 Simulator | March 2007 | 30 | 0.562 |
Strategic Sealift | December 2007 | 30 | 0.464 |
(1) The calculation of the refinancing gain was based on HMT policy but it also includes a package of contract changes guaranteeing the Department a total of £1.35 million. |
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