PART TWO  A refinancing has created benefits but also new risks for the Trust

2.1  THC Dartford's shareholders refinanced the PFI deal in March 2003, just over two years after the new hospital came into operation. The refinancing generated large accelerated financial benefits for THC Dartford's shareholders. This refinancing was one of the first applications of the voluntary code for early PFI deals which the Treasury and OGC negotiated with the private sector in 2002. It has followed the main principle in the code that the public sector would generally receive 30 per cent of refinancing gains on early PFI deals. The Treasury's proposed approach to calculating refinancing gains had not been fully accepted by the private sector at the time the code was launched. The negotiations with THC Dartford helped to establish how future refinancing gains would be measured. In return for its share of the refinancing gains the Trust, in consultation with the Department, also agreed to extend the contract period and accepted some additional risks. The Trust assessed the refinancing on these terms to be value for money although the Treasury and the Department agree that under current best practice further analysis to support this conclusion would have been undertaken before the refinancing. This early example of a refinancing under the new code which incorporates a contract extension gives rise to learning points for future PFI refinancings.