1.7 When this early PFI contract was awarded, Treasury guidance focused on the way that departments should approach PFI procurements. An awareness of what would be acceptable PFI contract terms for the public and private sectors emerged over a number of years as the first generation of PFI deals were concluded. Then, in July 1999, the Treasury issued guidance on standard contract terms which included advice on how departments should address refinancing issues.8 By the time this guidance was issued, the Prison Service had, in April 1999, already accepted an offer from FPSL of a share of the refinancing benefits as compensation for some additional liabilities that the refinancing created for the Service. The Prison Service was, therefore, in the process of finalising the contractual arrangements for this deal. These arrangements were finally agreed at the end of November 1999, at which point FPSL was able to proceed with the refinancing.
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8 The guidance on refinancings is set out in section 14.6 of Standardisation of PFI Contracts (HM Treasury July 1999).