Jump to content
House Price Crash Forum

How Much Pfi Debt Is There And What Term Is It Over?

Recommended Posts

How far in the hole is the country on PFI projects?

What length of term are PFI projects on - when does the last one expire?

What happens to the assets at the end of the term - are they the country's or the supplier's?

What is the interest rate (including all the bump up the rate fees etc)

If you don't have a link to any accurate data (does it even exist?), then take a guess

My guess, FWIW, is £750bn, term 15 - 25 years, real interest RPI + 6%, asset reverts to supplier at end.

Link to post
Share on other sites

There's a report by the House of Lords "Private Finance Projects and off-balance sheet debt" available at http://www.publications.parliament.uk/pa/ld/ldeconaf.htm

It's browsable, but I don't have time to browse right now, as I have work coming out of my ears. This is not a time to be turning work down when it's offered. Who needs sleep, anyway?

So, those who currently have leisure time and an interest can skim through it to see if there are any meaningful figures and report back, yes? :)

Link to post
Share on other sites

I don't believe that the asset reverts to supplier at end.

Mainly because they are built to such a low standard (the schools especially) that after the 40 years or so of the contract, the school building is worth sh!t all and is a liability.

The fact that there are still a large number of beautifully built, robust Victorian schools, still perfectly useable and PAID FOR, whilst they churn out crappy PFI schools that cost ten times their worth, 80% of which fail their CABE review (independent review to decide if they are up to a good standard), will look dated in 5 years and fall down in 20 is a national disgrace.

Link to post
Share on other sites

thanks for those reports that you linked to, although they make for depressing reading.

For those who don't have the time, this is pretty typical:

Although more PFI projects are completed on-time and on-budget, some witnesses argued this masked large cost increases which arose during the much longer bidding process. Ms Jaffe said: "Mysteriously, the price between the outline business case, which is at the start of that process, and the final business case at the end goes up fantastically, and so for the first wave of PFI hospitals, for example, it was mostly between 20 and 220 per cent. Some of that may be the public sector saying we want you to add all the twiddles and it has got to be gold-plated and so on, but a lot of it is because the consortia are protecting themselves from failing to provide to cost" (Q 571).

which boils down to:

Oh yeah, sure mate, I'll knock you up a lovely hospital, yeah, won't cost you more than 200 million quid...

...did I say 200 million, no, you must have misheard me

...400 million tops...

...actually best round that up to 450...

...plus maintenance! yeah i mean we'll change a lightbulb for £200 quid a pop, can't say fairer than that.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.