relationship with the Labour movement. argued that this could open up a market of as much as £6 billion worth of equity shares (upfront investment by PFI companies), carrying guaranteed, index-linked revenue from these projects, to be bought tively small component of a PFI investment normally around 10 per cent): but they can be very lucrative. Carillion, which sold on its stake Dartford's Darent Valley PFI hospital quadrupied its E4m investment in six years, generating a clear profit of E11m.
Investors expect to recoup around 10 per cent each year on their stake in operational PF schemes, while new projects commonly offer a rate of up to 15 per cent - three times the level of return from conventonal long-term investments.
And with minimal risk and the government/taxpayer footing the bill, it seems that the runaway costs of the next round of PFi hospital schemes will be putting a smile on the face of city slickers and shareholders for a generation to come. No joy for WINDFALL profits seem to have eluded one of the market leaders in PFI, support services company Jarvis, chaired Scotland has once again shown the way to the English Parliament as First Minister Jack McConnell announced that the government would cut its losses and buy out the controversial PFi contract for the Skye Bridge 18 years ahead of its completion.
As George Monbiot points out in the Guardian, the deal means that a bridge that was originally costed at £25m will have cost taxpayers and travelers a massive £93m in tolls, subsidies, cash payments and Infrastructure.
But if buying out the bridge contract makes political sense, surely it is time to look again at some of the other PFI contracts which are lining the pockets of shareholders as hospital Trusts, schools and other public services struggle to make ends meet.