3.  Example

One early contract provides for the private sector contractor to retain the assets at the end of the contract (subject to a right of buy out at market value from the Authority), unless there is a Authority default during the contract in which case, subject to termination payments by the Authority, they regain control of the asset. Our preliminary calculations, based upon the Authority borrowing from the PWLB to fund the termination liabilities and meeting the FM costs and lifecycle costs equivalent to the values allowed for in the project costings, showed a potential annual saving of circa 15 - 20% of the unitary charge from the termination of the contract - albeit that in addition to this a sum to pay for the asset is still due at the end of the contract period.