3.2 There are a number of principles which departments should keep in mind when they assess issues relating to refinancing. These principles will be relevant when a PFI project is being developed and also if a department is faced with a possible refinancing during the contract period. The key principles are that:
■ appropriate benefits should go to those bearing risks;
■ benefits from reducing costs in a developing market should be shared if they have not already been reflected in the contract price;
■ it is reasonable for departments to seek compensation for any increased exposure to termination liabilities arising from a refinancing;
■ substantial refinancing gains to the private sector may threaten the perceived value for money of the project;
■ a refinancing should not jeopardise the stability and success of the long term relationship between a consortium and a department; and
■ if the private sector seeks to improve its returns by renegotiating parts of a PFI contract it is reasonable for departments to seek a share of refinancing benefits.