Ultimately, the termination sum should be value for money

16  The Department based its strategy for negotiating the agreed termination sum on its estimate of Laser's contractual entitlement in the event of termination on the grounds of Laser's default. These provisions took account of the projected cost to the Department of completing the facilities. The estimate took the form of a range of likely outcomes, due to uncertainty in some parts of the calculation. The agreed termination sum, £75 million, was near the lower end of the range.

17  The Department expects substantially to complete the facilities in March 2007 and within a budget of £18 million. So far progress with the remedial and outstanding works is on schedule and within budget.

18  Up to and including the termination, the Department's investment in the new facilities was about £122 million (March 2005 prices). In return, the Department secured an asset that, for its 2004-05 accounts, was valued at £85 million and for which all but eight of more than 400 laboratories should be capable of being made to meet its specification in full. The private sector reported a loss of at least £100 million (Figure 2).