Press Releases

Successful PPPs to Generate Additional Large Gains for Taxpayers

Peter Gershon, Chief Executive of the Office of Government Commerce today announced a new voluntary code for sharing the gains from the Refinancing of the early PFI deals.

Under the code, supported by public and private sectors, the public sector will benefit from a 30% share of any refinancing gains, where there is no existing agreement, and the code provides a framework under which many other early PFI deals can be refinanced with similar results.

Speaking at a conference on Public Private Partnerships in London "Delivery - the Partnership Approach". Peter Gershon said,

"I welcome the private sector's support for the Code. This will enable the public sector to share in significant financial gains that it would not have otherwise been able to secure. This code, together with our earlier guidance on future PFI deals, should now bring a level of certainty to the Refinancing market."

Digby Jones, Director-General of the CBI said,

"The Code points to a mature understanding between the public and private sectors. The Government recognises that refinancing is healthy and should go ahead. And the private sector is willing to share refinancing gains voluntarily, because it recognises the high standards of public accountability required in PFI deals."

"The first few applications of the Code will be crucial in ensuring it establishes itself as a straightforward and valuable standard."

This Code parallels the refinancing guidance in the Standardisation of PFI contracts, which provides a 50% sharing of refinancing gains in new contracts. PartnershipsUK will work on behalf of the public sector in implementing the Code.

NOTES TO EDITORS:

1. Today's announcement follows previous guidance that all future PFI signed deals will achieve a 50/50 gain share in any refinancing. This is in line with OGC's standardisation of PFI contracts issued in July. See OGC press release of 29 July 02.

2. Copies of the voluntary code will be available on the OGC website.

3. Press enquiries to James Worron at OGC press office on 020 7211 1454 or e-mail James.Worron@ogc.gsi.gov.uk