The PFI deal is worth £489 million at Net Present Value

5.5  The Net Present Value of the Unitary Payment stream under the contract is £489 million. This was higher than the estimate of £404 million Net Present Value at preferred bidder stage largely due to increases in scope and final resolution of non-compliances during the single bidder period. The total payment is represented in the three stages of annual Unitary Payments, extending for 30 years, shown in Figure 10.

The figure shows the final agreed Unitary Payments and the dates that each stage is expected to commence

5.6  The building is scheduled to be finished and ready for occupation in 2003 and GCHQ is contracted to pay for the accommodation and services from 4 September that year. If by this time GCHQ is not ready to start moving its staff into the new building, it risks paying IAS for providing accommodation and services which are not being used.

5.7  In common with many PFI projects, the contract also encourages IAS to complete construction early, for which it would be entitled to receive extra payments. GCHQ would have to pay an additional one million pounds if the building were finished one month ahead of schedule; £750,000 a month if it were finished two or three months ahead and an additional £500,000 for the fourth month. In return for these payments, GCHQ would be able to mitigate risk to the programme through having the advantage of early access to the building to fit out and test the secure networks and to install Information Technology equipment. IAS currently expects to finish the new building 9‰ weeks early.