PAC to keep close eye on PFI refinancing schemes

The Commons public accounts committee has said it will keep a close eye on
private finance initiative (PFI) schemes which allow private investors to buy
into them.

Under the new rules, windfall gains from refinancing must be shared equally
between private investors and the state.

New rules were introduced following a series of refinancing deals that
enabled investors to make tens of millions of pounds by in effect remortgaging
schemes at lower rates of interest and a new report by the National Audit Office
revealed that £200m due to the taxpayer under various PFI schemes could be
nearly halved as a result.

Edward Leigh, chairman of the PAC ‘My committee will continue to keep an eye
on the secondary market to make sure there is no adverse effect on the
underlying projects.

‘Given the high refinancing returns we have seen being earned by some PFI
investors, the public sector needs a better understanding of the full range of
the private sector’s costs and benefits from PFI and it is incumbent on the
Treasury to lead this work.’

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