Magazine article Public Finance

MoD Deal Signed after Six Years Could Cost £12Bn

Magazine article Public Finance

MoD Deal Signed after Six Years Could Cost £12Bn

Article excerpt

An £8bn Private Finance Initiative contract signed by Ministry of Defence officials is likely to cost taxpayers £12bn over the course of the 35-year deal, it has been estimated.

Carillion, the support services and construction company, calculates that total revenue for Its joint venture deal to provide new accommodation and facilities management at army garrisons In Aldershot and Salisbury Plain will be £11.9bn.

The MoD revealed on April 7 that it had finally signed the Project Allenby/ Connaught contract, its largest PFI deal to date, more than six years after the deal was first floated.

Carillion, which owns 50% of the joint venture firm Aspire, will team up with engineers KBR (45%) and banking group HSBC (5%) to build and manage the 2OO MoD sites.

It will include a £1.2bn construction phase that will involve replacing 400 MoD buildings with 365 new structures to house 11,OOO soldiers. …

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