Table 12: Terminated PFI/PPP projects
| Date First date of operation & date of termination | Public Cost of termination (£m) | Projected saving (£m) | Unitary payments up to termination (£m) | Total cost of project based on unitary charges (£m) | Capital cost of project (£m) | |
| 31/07/1998 (financial close) - 20/12/2004 | National Physical Laboratory, Teddington, Middlesex Serco Group and John Laing plc each held 50% equity. Laing sold its equity to Serco for £0.8m in April 2003. | 75.0 | -37.0 public sector loss | 0.0 | n/a | 89.0 |
| Termination 8.3 years into contract | Terminated in 2004 after long construction delays and failure to meet specification. "Original private sector design of the new buildings was deficient" (NAO). John Laing plc lost £67m, subcontractors £12m, banks lost £18m and Laing's and Serco £4m in dividends. DTI invested £122m (including termination sum, compensation, procurement costs, upfront payments and unitary payments) and left with £85m assets. Private sector failed to meet quality specification for the laboratory. No unitary payments made as never reached operational stage as a PFI project. http://www.nao.org.uk/publications/0506/the_termination_of_the_pfi_con.aspx | |||||
| 15/05/1996 - 24/05/1999
| Benefits Payment Card PFI, Department of Social Security and Post Office Counters Ltd Pathway, ICL plc 7-year contract | 447.0 | n/a | 1,112.0 | 1,000.0 | n/a |
| Intended to replace paper-based methods of paying social security benefits and to automate the national network of post offices through which most payments are made. Long delays and technical problems and the Benefits Card system was abolished and replaced with direct payments to claimant's banks. ICL continued work on automation of post offices with a conventional public contract. The Department of Social Security wasted £127m on a related system but claimed £251m saving from reduced admin costs and less fraud. Post Office Counters made exceptional charge of £571m in the accounts and ICL wrote off £180m development costs. https://www.nao.org.uk/wp-content/uploads/2000/08/9900857.pdf | ||||||
| 1999-2000 Buyout 1.5 years into contract | Energy Centre, Mayday University Hospital NHS Trust, Croydon Miller Construction | n/a | n/a | n/a | n/a | n/a |
| PFI project for new energy centre did not perform as required and the contract was terminated in 2000. NHS Trust retendered for modifications and new computerized control system installed in 2003, which cost £0.3m. http://www.publications.parliament.uk/pa/cm200506/cmselect/cmpubacc/694/5111614.htm | ||||||
| 01/01/2002 - 2008
| Ministry of Defence, Defence Animal Centre, Melton Mowbray, Leicestershire Realm Services (DAC) - Parkwood Holdings plc and Barclays Bank | n/a | n/a | 26.5 | 109.0 | 11.0 |
| Poor performance and delays. Defence Animal Centre (Realm Services (DAC) Ltd "…has performed badly on estate management and the animal husbandry service" (NAO, 2008). Early termination of contract - £2.7m loss in 2009 accounts (Parkwood Holdings AR 2009 p2 and 61). https://www.nao.org.uk/wp-content/uploads/2008/10/0708343.pdf | ||||||
| 31/12/2002 - 18/07/2007
| London Transport, Metronet BCV Bakerloo, Central, Victoria and Waterloo & City lines. Balfour Beatty, WS Atkins, Elecricite de France, RWE AG (Thames Water) & Bombardier. | 170.0 - 410.0 | 0.0 | £5,040.0m - £5,100.0m | 8,700.0 in first 7.5 year period | 4,597.0 |
| Metronet had two 30-year PPP contracts for maintenance and renewal of the TUBE Lines and another for the sub-surface lines - see below. Both contracts terminated after 4.3 years. Cost overruns led to seeking to additional payment renegotiation with London Transport and later through the Arbiter who awarded significantly less than requested. Metronet BCV entered administration on 18 July 2007. Under terms of guarantee, London Transport had to purchase Metronet's outstanding debt six months after administration and received a £1.7bn government grant to do so. Transport for London took over work. Loss to public sector for both contracts in first 7.5 -year period was £170m-£410m (NAO, 2009). Shareholders lost £540m in equity, debt and other losses. https://www.nao.org.uk/wp-content/uploads/2009/06/0809512.pdf 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 | ||||||
| 04/04/2003 - 18/07/2007
| London Transport, Metronet SSL Sub Surface Lines - District, Circle, Hammersmith and City, Metropolitan and East London lines. Balfour Beatty, WS Atkins, Elecricite de France, RWE AG (Thames Water) and Bombardier. | See above | 0.0 | See above | See above | 6,180.0 |
| Terminated after 4.3 years. Cost overruns led to seeking to additional payment renegotiation with London Transport and later through the Arbiter who awarded significantly less than requested. Metronet SSL entered administration on 18 July 2007. Under terms of guarantee, London Transport had to purchase Metronet's outstanding debt six months after administration - received a £1.7bn government grant to do so. Transport for London took over work. Loss to public sector for both contracts was £170m-£410m (NAO, 2009). Shareholders lost £540m in equity, debt and other losses. https://www.nao.org.uk/wp-content/uploads/2009/06/0809512.pdf http://www.publications.parliament.uk/pa/cm200910/cmselect/cmpubacc/390/390.pdf 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 | ||||||
| 01/03/1996 - 30/07/1999
| Royal Armouries Museum, Leeds McAlpine Construction, 3i Group | n/a | 1.0 additional public sector grant p.a. | n/a | n/a | 43.0 included 28.5 public |
| Achieved only a third of 1.3m visitors forecast and plummeted to fewer than 200,000 within 2 years. Consortia refinanced deal twice but cumulative losses soared to £10m in 1999 and the Bank of Scotland refused further lending, forcing renegotiation of contract, ceased to be a PPP. Returned to public sector. http://www.nao.org.uk/publications/0001/royal_armouries_museum_in_leed.aspx | ||||||
| 1999 - 2004 | Edinburgh Royal Infirmary, Scotland McKeeson HBOS | n/a | n/a | n/a | 30.0 | n/a |
| Termination 5.0 years into operating contract | A PPP project to develop Hospital Information System related to the hospital PFI project. Terminated after 5 years in 2004 with no payments being made to contractor. | |||||
| 13/08/1998 - 01/08/2013
| Transport for London Seaboard Powerlink Ltd - UK Power Networks Services Ltd (80%) ABB UK (10%) and Balfour Beatty (10%). | 160.0 | 225.0 | 774.6 | 1,801.0 | 134.0 |
| London Underground Power Supply PFI contract terminated at half-way break clause to make "significant savings" and "avoiding expensive financing costs" (TfL press release 16 August 2012). Termination payments will be made to shareholders. 30-year contract. | ||||||
| 2001- 2003 | Norfolk County Council Capita Group plc | n/a | n/a | n/a | 50.0 | n/a |
| Termination 2.0 years into operating contract | PPP project. E-government project including exchequer, payroll, pensions and IT services PFI contract started 2001 terminated six years early in 2003 and staff returned in-house. Serious concerns about ability of Capita to deliver project. Capita sought substantial additional fee for completion of financial management information system. Decision to terminate taken on 26 June 2003 with effect from 31/12/2003 by Leader of the Council. Cabinet Scrutiny Committee 18 March 2002 and 2 September 2003 | |||||
| 01/01/2002 - 01/08/2009
| Cornwall Grouped Schools 1 New Schools Cornwall - Innisfree Ltd, John Mowlem & Co. and WS Atkins | n/a | -10.0 cost of remedial work | 50.5 | 215.4 | 36.0 |
| 25-year PFI contract signed 2001 to refurbish and maintain 28 schools but stream of complaints from head teachers and governors over 7 years led to Council terminating contract. New Schools went into administration. Council had to step in to carry out £10m essential remedial repairs. Shareholders (Innisfree 100% from March 2004) lost £4.8m on termination of contract in 2008. https://www.nao.org.uk/wp-content/uploads/2012/02/10121792.pdf | ||||||
| 13/08/1998 - 17/08/2010
| Transport for London Oyster Card TranSys (Electronic Data Systems and Cubic Transportation Systems) Originally known as the Prestige project | 1.0 | 30.0 | 1,000.6 | n/a | 161.0 |
| 17-year contract but Transport for London used break clause to cancel following two major technical failures and £1m in lost fares in 2008. New contract agreed in November 2008 to run from 2010-13 for two of the original consortium shareholders to run the system with TfL gaining ownership of Oyster brand. Projected saving of £30.0m https://next.ft.com/content/8979a560-65a3-11dd-a352-0000779fd18c | ||||||
| 2002-2005
| Crymlyn Burrows waste treatment plant, Swansea, Wales. HLC Environmental Projects (HLC, Portugal utilities company), financed by Bank of Scotland | n/a | n/a | n/a | n/a | 40.0 |
| Terminated by Neath Port Talbot Council in 2005 because it was incapable of handling the daily tonnage of contracted waste. Since operated by local authority. Long legal dispute over the right to the assets - bank wanted open market sale but Council gained High Court approval to purchase and operate the assets http://www.letsrecycle.com/do/ecco.py/view_item?listid=37&listcatid=234&listitemid=7881 | ||||||
| 2006-31/12/10
| FireControl Project, Department for Communities and Local Government PPP contract for 9 regional emergency call centres. IT system contracted to European Air and Defence Systems (EADS) Original cost of project £120m. | 469.0 84.8 | n/a | n/a | n/a | 130.0 |
| Failure of computer system led to termination of the project in December 2010 by which time 9 regional centres had been completed. Consultants cost £68.6m or 76% of the cost of the central project team. Turner and Townsend, capital projects managers, were contracted to organize procurement to build the 9 centres to a pre-defined design and high specification. Even if all regional centres are relet (only 5 by end of 2013) "…the minimum waste from the project will be £469 million." In addition, the Department had to allocate a further £84.8m to meet the project's original objectives. Government has 20-25 year contracts after which the private sector will own the buildings!! https://www.nao.org.uk/wp-content/uploads/2011/07/10121272.pdf http://www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1397/1397.pdf "It is inconceivable that we will fully recover the rental costs on these centres", Sir Bob Kerslake, Head of the Civil Service, May 2013 http://www.yorkshirepost.co.uk/news/exclusive-taxpayer-funding-bribes-on-empty-fire-hq-1-5693923 | ||||||
| 01/01/2006 - 25/11/2011 | City Link DLR, London City Airport Rail Enterprises plc | n/a | 250.0 | 108.5 | 551.6 | 147.0 |
| Termination 5.9 years into operating contract | 30-year concession for Canning Town to London City Airport. "…we have reassessed the effectiveness of the financing arrangements that sit in the companies behind the projects", said Howard Smith, Chief Operating Officer of TfL London Rail. Transferred to public ownership. TfL expected 'ongoing savings' of up to £250m over the remaining life of the concessions including Woolwich DLR - see below | |||||
| 01/04/2009 - 25/11/2011 | Woolwich DLR, London Woolwich Arsenal Rail Enterprises Ltd | n/a | See above | 76.4 | 585.1 | 183.0 |
| Termination 2.6 years into operating contract | 30-year concession for extension to Woolwich - see City Link DLR above. Transferred to public ownership. | |||||
| 16/11/2000 - 15/08/2012 | London Fire & Rescue Authority AssetCo | n/a | n/a | 145.4 | 292.0 | 118.0 |
| Termination 11.75 years into operating contract | 20-year contract for fire vehicles and equipment. Fire Brigade review found serious performance shortfalls. AssetCo London Limited (financial close November 2000), AssetCo Lincoln Limited, AssetCo Engineering Limited and AssetCo Solutions Limited sold for £2 (two pounds) to AB & A Investments Limited after £16.5m loss in six-month period to 31 March 2012. https://davidhencke.wordpress.com/tag/assetco/ http://www.assetco.com/Investor-Relations/Annual-Reports/Preliminary-Results-2012.aspx | |||||
| 2006 - 15/08/2012 | Lincolnshire Fire Authority AssetCo | n/a | n/a | n/a | 60.0 | n/a |
| Termination 6.0 years into operating contract | 20-year contract signed in 2006 but terminated in 2012 after Auditors qualified AssetCo accounts following financial crisis. http://www.bbc.com/news/uk-england-lincolnshire-17708260 http://www.assetco.com/Investor-Relations/Annual-Reports/Preliminary-Results-2012.aspx | |||||
| 07/02/2012 (financial close) - 07/04/2014 | Norfolk County Council PFI Waste contract Cory Environmental Management Ltd 50% and Wheelabrator Technologies Inc. 50% | 30.3 | n/a | 0.0 | 581.3 | 155.1 |
| Termination 1.7 years into contract | Press Release: Council terminates energy from waste contract, 7 April 2014, on the grounds that the SPV had failed to secure satisfactory planning permission for an energy from waste plant near King's Lynn. Strong community opposition to the incinerator plant. Government withdrew £169m waste infrastructure grant (PFI credit) in November 2013 from the 25 year PFI contract. The UK Green Investment Bank had agreed to invest £51m in the plant earlier in 2014. http://www.norfolk.gov.uk/news/NCC145814 Cabinet Report http://resource.co/government/article/norfolk-county-council-abandons-incinerator-plans House of Commons Public Accounts Committee DEFRA: Oversight of three PFI waste projects, September 2014, HC 106 http://www.publications.parliament.uk/pa/cm201415/cmselect/cmpubacc/106/106.pdf | |||||
| 01/03/2004 Leonardo Investments Holdings Ltd (80%) and Vinci (Holdings) Ltd (20%) 2006 - 2016 (operational contract) Termination 12.3 years into contract | Medway Youth Custody Centre G4S 30-year contract | n/a | n/a | 32.5 | 138.8 | 23.0 |
| Ministerial statement on takeover https://www.gov.uk/government/speeches/youth-justice-announcement Report of takeover on 1July 2016 http://www.kentonline.co.uk/medway/news/government-take-over-youth-jail-98358/ BBC Panorama programme exposed evidence of abuse and threatening behavior by custody officers http://www.bbc.com/news/uk-england-36210923 G4S to sell its UK Children's Services business, 26 February 2016 | ||||||
| Total 20 | 1,677.1 | 459.0 | 8,427.0 | 14,114.2 | 12,047.1 | |
Notes: Termination calculated from date of financial close of contract when contract terminated during construction, otherwise termination is period between start of operation and date of contract termination.