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'WIDENING SCANDAL HITS PFI'

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Developers and City financiers are changing the terms of loans used to build prisons, schools and hospitals for the...
Developers and City financiers are changing the terms of loans used to build prisons, schools and hospitals for the government in order to make extra profits running into multi-millions of pounds, reported The Observer (Business, p1 and feature p5).
An investigation by the newspaper claims to have uncovered eight undisclosed examples of developers 'refinancing ' deals to build and operate public facilities under the PFI initiave. The windfalls are not always shared with taxpayers.
The Observer says the news will add to the growing row over refinancing sparked lsast month by a potential£70m gain for developers from the new Norfolk and Norwich Hospital. Public sector unions want PFI consortia to be stripped off this sort of gain.
According to the newspaper, among the projects delivering the windfalls are five jails run by Premier Prison Services; two trunk road projects; and the appointment of PricewaterhouseCoopers to refinance the£133m Dartford and Gravesham Hospital in Kent.
Government officials have told developers to 'keep a low profile' on details of restructured loans to avoid bad publicity. However, industry insiders said that gains from four of the deals total£35m and said that the deals being revealed by The Observer were the 'tip of the iceberg'.
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