1.9 The Prison Service considers that the Fazakerley PFI prison has been a success because the prison opened five months ahead of schedule and, although some payment deductions have been made where FPSL has not fully met its contractual obligations, the Prison Service has generally been satisfied with FPSL's operational performance. The Service thinks that the success of this contract has helped the wider PFI prison programme which has provided over five thousand new prisoner places more quickly than would have been achieved under conventional procurement.
1.10 The Prison Service acknowledges that the success of the project contributed to the opportunity for a refinancing to take place and that, therefore, it is reasonable for FPSL to benefit from the refinancing as a reward for taking risks in successfully developing this first PFI prison project. The Service also did not wish to deter FPSL or other consortia from bidding in future PFI prison competitions by removing opportunities for them to benefit from this type of project.
1.11 The Service has continued to explore with bidders how contract prices and overall value for money will be affected by different approaches to the sharing of refinancing benefits. These issues include whether contractors will be encouraged in a competitive market to take greater risk in pricing a PFI contract in return for retaining refinancing benefits in the future.