Table 11: Buyout of PFI/PPP projects
| Date First date of operation & date of buyout | Project and companies | Buyout public cost (£m) | Projected Saving (£m) | Unitary payments to date of buyout (£m) | Total cost of project based on unitary charges (£m) | Capital cost of project (£m) | |||||
| 01/10/1995 - 21/12/2004
| Skye Bridge, Scotland Miller Civil Engineering Ltd, Dyckerhoff, Widmann AG (known as Miller-Dywidag) & BankAmerica International Finance Corporation | 26.7 | 0.0 | n/a | n/a | 39.0 | |||||
| Closed ferry service when bridge opened in 1995 followed by vociferous community campaign against high toll fees. Tolls frozen at 1999 prices for remainder and abandoned in 2004 and concession terminated with £26.7m payment by Scottish Executive. No savings after taking account of future taxes by operator and user tolls. Voluntary compensation package with Skye Bridge Limited http://www.auditscotland.gov.uk/docs/central/2005/s22_se_consol_resource_accounts.pdf http://archive.scottish.parliament.uk/s3/committees/finance/inquiries/capInvest/adviser_buyouts.pdf | |||||||||||
| 23/05/1999 - 2006
| Inverness Air Terminal Ltd. Scotland Highland-Inverness Airport Infrastructure Investors (Barclays Bank), Gleeson and Noble Group | 27.5 | n/a | n/a | 73.0 | 9.5 | |||||
| Scottish Executive funded buy-out by Highland & Islands Airports Ltd. Structure of contract considered disincentive to growth of new services. Airport operator had to pay the PFI company £3.50 for every passenger flying from the airport. Considered PFI was a tax on expansion. http://archive.scottish.parliament.uk/s3/committees/finance/inquiries/capInvest/adviser_buyouts.pdf www.scottish.parliament.uk/s3/committees/finance/inquiries/capInvest/adviser_buyouts.pdf | |||||||||||
| 01/09/2001 - 01/06/2007
| West Lothian College, Scotland HBG (Royal BAM Group) | 27.5 | n/a | n/a | n/a | 17.8 | |||||
| Scottish Funding Council, supported by Scottish Executive, bought-out contract - based on assumptions of student growth that did not materialize leaving £11m funding gap over 20 years. Change in funding policy and college faced financial crisis in funding PFI project. http://archive.scottish.parliament.uk/s3/committees/finance/inquiries/capInvest/adviser_buyouts.pdf | |||||||||||
| 15/05/2000 - 17/03/2008 | Croydon Tramlink, London Tramtrack Croydon Limited - Bombardier, Sir Robert McAlpine and Amey plc | 98.0 | n/a | n/a | n/a | 205.0 | |||||
| Buyout 7.8 years into operating contract | 99-year concession signed November 1996 and opened May 2000. Failed to meet traffic projections. Financial losses of £18.3m between 2000-03. By 2008 it could cover operating costs but could not service its debt or invest in the system. Disputes with Transport for London (TfL) and decision taken to acquire the company to improve integrated system. TfL also paid compensation payments to company for changes to fares and ticketing policy - £4m paid in 2006/07. http://content.tfl.gov.uk/Item05-Tramlink-Performance-and-Planning-Update.pdf | ||||||||||
| 31/12/2002 - 07/05/2010
| London Underground, Jubilee, Northern and Piccadilly Lines (JNP) Amey UK plc, Bechtel Corporation and Jarvis plc | 310.0 | n/a | 4,800.0 | 4,800.0 in first 7.5-year period | 5,526.0 | |||||
| Transport for London (TfL) acquires Tube Lines on 27 June 2010 by acquiring shares for £310m. Context of failure of Metronet contracts in 2008 - see Table 11. Tube Lines proposed £5.75bn costs for next 7.5-year period but Arbiter proposed £4.4bn costs. TfL acquired £1.3bn of Tube Lines £1.6bn debt to reduce borrowing costs. Amey reported £1.7m profit on sale (Annual Report 2010 p 47) Bechtel Corporation Press Release 07/05/2010 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/1146.pdf http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/1146we05.htm http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01746#fullreport | |||||||||||
| 01/11/2004 - 01/01/2011
| West Park Hospital, Tees, Esk and Wear Valleys Mental Health NHS Foundation Trust Norwich Union PPP Fund, now trading as Aviva | 18.0 | 14.0 | 9.5 | 53.4 | 15.7 | |||||
| NHS Trust carried a review of three PFI projects and opted to terminate the longest running project - West Park Hospital, Darlington. It paid £18.0m in 2011 to buy-out the 30-year contract with Aviva, aided by a surplus in its 2010 accounts. Trust will save £14m over remainder of the contract. http://www.telegraph.co.uk/news/health/news/8296685/Hospital-saves-14m-by-getting-out-of-PFI-deal.html http://www.theguardian.com/healthcare-network/2011/feb/03/pfi-nhs-trust-paid-off-tees-esk-wear | |||||||||||
| 01/12/2000 - 01/04/2013
| Care Homes, London Borough of Southwark Anchor Group | n/a | 12.0 | n/a | n/a | n/a | |||||
| 25 year PPP contract to rebuild four care home in Southwark. Anchor will continue to provide care services in the homes. | |||||||||||
| 31/03/2003 - 01/01/2014
| Hexham Hospital, Northumbria Healthcare NHS Foundation Trust Lend Lease Infrastructure Fund and Uberior (Aberdeen Asset Management) 30-year contract | 107.2 | 14.3 | 67.0 | 252.6 | 54.1 | |||||
| Northumberland County Council loaned the NHS Trust £114.2m (which in turn borrowed from the Treasury's Public Works Loan Board) to buy out the PFI project. Hospital saved £3.5m per annum through buyout. Northumberland CC borrowed the money from the Treasury's Public Loan Board. Details of buyout in Part 3. https://www.northumbria.nhs.uk/news/northumberland-hospital-changes-hands-pfi-pay-out-deal-finalised | |||||||||||
| 03/09/2001 - 01/07/2015
| Dyfed Powis Police, Ammanford Police Station, Wales Dolef Cyfrynedig (property company) | n/a | 3.1 | 9.2 | 21.2 | 5.3 | |||||
| Station completed in September 2001 and contract terminated July 2015 saving £3.1m over remaining 16 years of contract. Termination cost £160,000 in legal fees. The police station was closed for several years when its front desk services were replaced by a mobile van in a car park. http://www.carmarthenshireherald.com/5973/police-buy-police-station/ | |||||||||||
| 17/05/2004 - 15/11/2015
| Ruthin County Hall Offices and Market Hall, Denbighshire Council, Wales NYOP Ruthin Limited | 16.9 | 12.0 | 25.2 | 65.6 | 12.1 | |||||
| Completed in May 2004 but terminated 15 years early in November 2015 and will avoid £12m costs over the next 15 years. Finance Report, Cabinet, 27 October 2015. Council sought full control of the building, costly restrictions imposed by the PFI contract on the number of staff based in the building, use of the car park and prescribed (costly) maintenance arrangements. https://moderngov.denbighshire.gov.uk/ieListDocuments.aspx?CId=281&MId=5146&Ver=4&LLL=0 http://www.dailypost.co.uk/news/north-wales-news/denbighshire-council-pays-17m-out-10518026 | |||||||||||
| 01/09/2010 - 01/08/2014
| Lancashire County Council & Blackpool Council Waste Management Contract Global Renewables UK Limited/AMEC 50% and Catalyst Lend Lease Holdings 50% | 4.5 | 264.0 | 314.3 | 1,991.1 | 262.2 | |||||
| 25 year contract to build two waste processing facilities at Thornton and Farington. Problems at both sites in 2013 with 75% of waste going to landfill. Government withdrew £6m annual PFI credit because of the change. Press Release: New deal secures savings on waste processing, 1 August 2014, http://www.lancashire.gov.uk/news/details.aspx?Id=PR14/0363 http://www.lep.co.uk/news/scrapped-the-controversial-2bn-recycling-scheme-1-7741123 http://www.ciwm-journal.co.uk/lancashire-county-council-waste-shake-up-could-see-250-jobs-lost/ | |||||||||||
| Total 11 | 636.3 | 319.4 | 5,215.7 | 7,256.9 | 6,146.7 | ||||||