Q141 Mr Bacon: Can I tell you the answer? It is because the Treasury forbade it, is it not? The Treasury issued guidance forbidding the inclusion of refinancing clauses, did it not?
Mr Kingman: I am afraid that I do not know whether the answer is yes or no.
Mr Bacon: Mr Abadie?
Mr Abadie: I understand that to be correct.
Q142 Mr Bacon: Could you send us a copy of that guidance please?
Mr Abadie: We will do so.
Q143 Mr Bacon: You are aware, are you not, that the Department of Health, acting as I understand it on Treasury guidance, forbade the Norfolk and Norwich hospital from including a refinancing clause in its contract, although it would very much liked to have done so? I know that because it is on the borders of my constituency and the Chief Executive and the Finance Director told me that they would have loved to have had a refinancing clause at the outset, but they could not, could they?
Mr Abadie: I am not aware of that particular point, but I understand your point about the wider policy.
Q144 Mr Bacon: They could not do it because they were forbidden from doing it by the Department of Health and the Treasury. Is not that the case?
Mr Abadie: I do not know the answer to Norfolk and Norwich.
Q145 Mr Bacon: But generally speaking, it is correct that Treasury guidance prohibited the inclusion of refinancing clauses early on?
Mr Abadie: That is correct. The position of the Treasury at the time was that to encourage entrants into the market-both debt and equity-we would not include refinancing or gain-share clauses in that, as was customary on similar programmes.
Q146 Mr Bacon: I would just like to get a copy of the guidance; it would be very helpful to get it published in our Report.3 You mentioned earlier that you have collected a lot of information, although the information on the older projects is more out of date, and that one must look in a couple of different places-on the Partnerships UK website and, I think, on the Treasury's own website. How many PFI projects are there all together?
Mr Abadie: There are just over 750 projects. I want to clarify something that you said, however: the data are all available on the Partnerships UK website to public authorities; we have a slimmed-down version of that on our public website.
Q147 Mr Bacon: Of those 750, how many are on- balance-sheet projects and how many are off-balance-sheet projects?
Mr Abadie: I am not sure of the numbers. There is a detailed reconciliation and we can provide it to the Committee, if you would like. It depends on the construction stage of the project. If a project is under construction it scores against the public sector balance sheet when it starts operations. Even though there are 750 signed deals, one cannot just make a cut as to which are on and which are off, because it depends on the stage in the construction period.
Q148 Mr Bacon: Two particular pieces of information interest me. First, out of the 750 deals, what is the current situation-which are on and which are off balance sheet? Secondly, how much by value is on and off balance sheet? Can you provide that information?4
Mr Abadie: We can.
Q149 Mr Bacon: What is the total value of the 750 deals at the moment?
Mr Abadie: Just over approximately £50 billion. The reason I am slightly cautious is that one big transaction-the Committee has considered it previously-is that relating to London Underground. That counts for £16 billion to £17 billion of the total. However, the way the transaction works means that there is approximately £1 billion a year of asset spending over 15 years, which is how that number arises.
Q150 Mr Bacon: Okay. It would be helpful if you could send us a detailed note containing a list with the number of projects, details of those that are on balance sheet and those that are off balance sheet, and the value of those that are on and off balance sheet.5 When you said £50 billion, what did you mean? Did you mean the net present value or the cumulative value of the annual unitary payments, or what?
Mr Abadie: No. That number is the capital value of the projects, which means different things to different people. In effect it is the initial build cost.
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3 http://www.hm-treasury.gov.uk/documents/public_private_partberships/ppp_guidance_index.cfm