PPP equity holders have suffered financial losses when PPP projects have been terminated or the construction company has gone bankrupt. However, the losses incurred in these projects are relatively small given the potential long-term profits in PPP projects.
Ten UK PPP projects have been terminated, a further five were bought out by the public sector on termination and another five projects have experienced major problems - see Appendix 4. Globally, nearly 1,000 projects with a total value of US$511.2bn had been terminated or were distressed by late 2009 (Whitfield, 2010).
The Tees, Esk and Wear Valleys Mental Health Foundation Trust used a voluntary termination clause to buy out the PFI contract for a £16m adult mental health hospital in Darlington. The project, financed over 32 years, was signed in 2003 with Norwich Union (now Aviva). The Trust had a cash balance in its 2010 accounts and paid £18m to Aviva to terminate the contract, saving about £14m over the remaining term of the contract (Tees, Esk and Wear Valleys Mental Health Foundation Trust, 2012).