§ Alan SimpsonTo ask the Secretary of State for Defence what public safeguards his Department builds into its(a) private finance initiative and (b) public private partnership contracts to prevent the private sector partner from taking excess profits by way of refinancing schemes. [184664]
§ Mr. IngramSince November 2000, it has been the Ministry of Defence's policy, in common with other Government Departments, that all Private Finance Initiative (PFI) contracts and those Public Private Partnership contracts involving the use of private finance, must contain legally binding conditions whereby any gains from refinancing are shared with the MOD on an equal basis. For contracts signed before November 2000 this right is obtained under a code of conduct agreed with industry.
§ Alan SimpsonTo ask the Secretary of State for Defence what contractual steps his Department plans to take to prevent(a) private finance initiative and (b) public private partnership partners from selling on their stakeholding. [184665]
§ Mr. CaplinIn common with other government departments, the Ministry of Defence does not seek to restrict unnecessarily the shareholders in Private Finance Initiative (PFI) and Public Private Partnerships (PPP) projects from transferring or selling their equity720W stakes to another commercial entity. Such restrictions would constrain the availability of capital for such projects and therefore adversely affect value for money. Exceptions to this can be made during the construction/ introduction to service phase when some restrictions may be placed on sales or transfers of equity from shareholders who are also key subcontractors, as these might have an adverse impact on the success of the project. Additionally, provisions are usually included in MOD PFI and PPP contracts which place an obligation on the service provider and its shareholders to obtain the MOD's consent to any sale or transfer. This is to prevent any transfer that might be prejudicial to the national interest, e.g. for reasons of national security.