For 24 projects, Departments have not indexed the unitary charge payments with an inflation assumption. In these cases we have factored in a generic indexation approach, indexing 40% of the unitary charge (an assumption designed to cover the proportion of the project cost affected by inflation) at 2.75% (RPI at the inflation target level ie equivalent to 2% CPI). This is consistent with the terms we would expect to be used in projects across all sectors of the PFI market. For clarity, these projects are marked on attached data return. Again, we are seeking to track the exact indexations for these projects with Departments and will update the PAC on this shortly.
[Access Indexation - PDF]
At the hearing on the Governement's use of consultants, Mr Bacon asked a series of questions relating to the earlier hearing on PFI refinancing. The reponse to these is as follows: