08 November 2002
The NAO said measures introduced by the Office of Government Commerce after negotiations with the private sector reflect concerns raised about the sharing of the benefits of refinancing.
A survey into PFI contracts found that 61% did not have contractual arrangements to share gains made in refinancing, which is when the private sector contractor renegotiates terms with its lender as risks diminish.
Departments had secured at least £17m out of total gains of about £65m from 12 completed refinancing deals. The survey also discovered that some departments had not been aware that deals had taken place. In PFI update, published on November 7, the NAO stated: 'It is likely that some refinancings have occurred without departments' knowledge.'
Sir John Bourn, the comptroller and auditor general, said: 'This is a complex area and departments will need to become more expert in this topic.'
PFnov2002
