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Private Finance Initiative

Volume 404: debated on Tuesday 15 April 2003

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To ask the Secretary of State for Defence if he will make a statement on the expected saving to public funds from the Private Finance Initiative schemes due to become operational in 2003. [105729]

I refer the hon. Member to the answer given by the Chief Secretary to the Treasury on 10 April 2003, Official Report, column 400W.

The Department will pursue the Private Finance Initiative (PFI) wherever it delivers the value for money quality services that we require. There are a number of projects that are likely to be signed within 2003 and others that are already signed that will commence service delivery. Information relating to projects in procurement is available on the Department's PFI database:

To ask the Secretary of State for Defence how many PFI contracts his Department or its agencies (a) have with and (b) are being tendered for by (i) Amey plc and (ii) consortia involving Amey plc; what the total value is of those contracts; what the average length is of the contracts or proposed contracts; and what assessment his Department has made of the financial position of Amey plc and the implications for his Department. [108332]

Amey is involved with the signed PFI deal for the Main Building Redevelopment, which is a 30-year deal worth a total of £746.1 million (net present value). The contract is with Modus Services plc. Amey provides services as a sub contractor to Modus. Responsibility for meeting the contract therefore rests with Modus who are ensuring that the Ministry of Defence's requirements are met.Amey is also part of consortia on the short lists of bidders for the Allenby Connaught project (the redevelopment of the major garrisons in the Salisbury Plain area and Aldershot) and the C Vehicles project (earthmoving and specialist plant, engineer construction plant and materials handling equipment). The length of these contracts will be 30 and 15 years respectively, with a combined value in excess of £2.4 billion (net present value).The procurement process for PFI includes an assessment of the financial robustness of bids and in most cases, these involve more than one party, thereby adding to their financial strength. Furthermore, the Ministry of Defence makes an assessment of the financial capability of many companies before placing contracts with them. As a result of such an assessment, the Department may require financial indemnities or guarantees before awarding contracts. The results of such assessments are commercially sensitive and are being withheld in accordance with Exemption 13 of the Code of Practice on Access to Government Information. It would be inappropriate to comment on the financial position of particular companies, which is a matter for the shareholders concerned.