• the Norfolk and Norwich Hospital NHS Trust (the Trust) let one of the first PFI contracts to a consortium - Octagon - in 1998;
• just two years after the new hospital opened, Octagon refinanced the project and increased its investors' rate of return three times the level predicted when bidding for the contract;
• the Trust only received 29 per cent of the refinancing gains despite taking on substantial new risks following the refinancing;
• this outcome was achieved by Octagon increasing its borrowings by 53 per cent (from ₤200 million to ₤306 million) and using the increased funds to accelerate the financial benefits to the investors. After other adjustments, the total refinancing gain was ₤116 million;
• Octagon retained ₤82 million of the gain, increasing investors' internal rate of return from the predicted 19 per cent to 60 per cent;
• in securing the right to receive ₤34 million of the gains, the Trust accepted that the money it would have to pay to end the contract early could increase by up to ₤257 million because its termination liabilities are related to the amount of Octagon's outstanding borrowings; and
• the Trust also agreed to extend the PFI contract from 34 years to 39 years, and to receive its share of the refinancing gains over the life of the contract rather than as an immediate payment.