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Public Finance Contracts

Volume 455: debated on Thursday 18 January 2007

To ask the Secretary of State for Transport what (a) public-private partnerships and (b) private finance initiative contracts have been entered into by his Department; what assets were transferred to the private sector as part of each deal; what the value of these assets was; what the total cost is of each contract; and what estimate was made of the cost to his Department of traditional procurement over the life of each contract. (109344)

A table with estimated total capital value, estimated total unitary charges payments and the conventional public sector comparator for PFI projects overseen by the Department for Transport that have reached financial close has been placed in the Libraries of the House.

No assets were transferred to the private sector as part of these deals.

PFI capital values typically refer to the cost of constructing project assets. The cost information in the table is an estimate of these costs. They are estimated costs because it is a feature of PFI contracts that responsibility for construction risk is transferred to the contractor. The final cost is the responsibility of the contractor. The construction cost is an element of the unitary charge payment. The total unitary charge is a projection that covers payment for both the construction cost and other costs that arise from delivering the service. These typically include the cost of maintenance, managing the service, and operational activities over the duration of the contract. The estimated unitary charge may vary over the duration of a contract as it reflects changes in the indexation of payments, usage related-payments, contract deductions and service changes.