Magazine article Public Finance

Everything You Wanted to Know about the PFI

Magazine article Public Finance

Everything You Wanted to Know about the PFI

Article excerpt

Campaigners for greater openness about the Private Finance Initiative have had a good week.

First, major contractor Carillion broke ranks and publicly valued its PFI holdings, revealing that its £29m investment in 18 schemes has almost trebled in the past 18 months and is now worth £83m.

Companies have until now been shy, to say the least, about revealing their PFI valuations, but Carillion's decision to break omerta leaves its counterparts looking rather exposed. As a result, tracking contractors' profits might have become just a little easier.

Secondly, a long-awaited database has been launched that brings together data on all 633 PFI and public-private partnership contracts signed in the UK.

It is the brainchild of Partnerships UK, the organisation that advises public sector bodies entering into PFI and PPP deals, and is intended to bring greater transparency to a sector traditionally wreathed in a fog of confusion.

The database is free to use and accessible through PUK's own website. It draws together all the publicly available information that currently lies scattered, often in inaccessible form, throughout government departments, local authorities and the rest of the public sector.

Information available includes which projects have been signed, their capital value, which firms built and own the facilities, whether they are open, and who the advisers were.

It is currently limited to details at the time the contracts were signed but as the database, which went live on March 10, is developed it is expected to reflect changes in the market.

Andy Carty, PUK's chief operating officer, has told Public Finance that the organisation plans to increase the data available on the site in phases. He envisages it expanding to include operational and financial data, although he is unable to say yet how it will be presented and admits it is contingent on the information that public bodies and private firms are willing to make available.

Details of refinancing deals, changes of ownership resulting from secondary market sales and debt holdings are examples of the type of information the database might hold in the future.

Carty says the introduction of the Freedom of Information Act in January has heralded a significant shift towards greater openness among public bodies.

This is a welcome development that will help dispel suspicions about the PFI and foster confidence in the market, he says, which might in turn influence firms' behaviour. …

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