1.3 The operation of the Code is very important to enable the Government to secure a voluntary share of refinancing gains from early PFI contracts, most of which do not have a sharing mechanism but have the greatest potential for refinancing gains.
The Government gains under the voluntary sharing arrangements of the Code have so far been £72 million of the anticipated £175-200 million
1.4 At the PAC10 hearing in December 2002 on the NAO's PFI refinancing update report11, the OGC stated that the expected gain to the public sector from the voluntary sharing arrangements under the Code would be in the region of £175 to £200 million, although the period over which this gain would accrue was not indicated.
1.5 The 20 refinancings which have occurred under the Code have resulted in a total refinancing gain of £247.2 million. Of this, the public sector has secured the right to receive £71.5 million (Figure 5), 28.9 per cent of the total gains. The amount receivable by the public sector falls well short of the £175 to £200 million estimated by the OGC in 2002.
1.6 However, the 2002 estimate was only an approximation using a simple methodology based on a small amount of data on completed refinancings available at the time. In addition, the OGC did not set any time limit within which the £175 to £200 million estimate would be achieved. The amount received has also been influenced by a number of other factors (paras 1.8 to 1.24).
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10 22nd Report from the committee of Public Accounts, PFI refinancing update (HC 203 June 2003).