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PFI Scotland Edition 8: July 2000

17 January 2000

Andrew Wilson (Central Scotland) (SNP): To ask the Scottish Executive at what discount rate is the "break even point" at which public procurement and the PFI alternative are equal in each PFI project in which the Scottish Executive have been involved to date.
(S1W-2170)

Mr Jack McConnell: Determining the "break even point" is not a formal requirement in PFI business cases submitted to Scottish Executive or prepared by it. The value for money quantitative assessment has been made at the Government discount rate which was relevant at the time. It is 6% (real) at present. The information asked for on each project is not available.

26 January

Mr Murray Tosh (South of Scotland) (Con): To ask the Scottish Executive, further to the answer to question S1W-3423 by Sarah Boyack on 16 December 1999, whether it will publicise the criteria which it will use to determine whether the proposed Public Private Partnerships for the M77 Fenwick to Malletsheugh motorway extension demonstrate value for money.
(S1W-3674)

Sarah Boyack: Since 24 June 1999 it has been Scottish Executive policy to make Full Business Cases for all central Government public/private partnerships publicly available.

25 February

Ian Jenkins (Tweeddale, Ettrick and Lauderdale) (LD): To ask the Scottish Executive whether the proposals for the realignment of the A701 in Midlothian as accepted by the Executive on 1 February still contain each of the measures for enhancing bus services and public transport contained in the original proposals for a PFI based project that went before the regulatory services committee of Midlothian Council on 14 September 1999.
(S1W-4322)

Sarah Boyack: The Scottish Executive does not have information on the details of proposals at stages prior to their submission to the Scottish Ministers. However, the Notice of Intention to Develop in respect of improvements to the A701, which was submitted to the Scottish Ministers following the Council's meeting on 14 September 1999 and which I announced on 1 February would not be called in for decision, was accompanied by a statement which detailed measures to improve public transport and enhance bus services.

3 April

Lord James Douglas-Hamilton (Lothians) (Con): To ask the Scottish Executive whether the original challenge funding for the A701 was specifically for developing Private Finance Initiative-based projects and at what stage it was notified that the project would be funded in a conventional manner.
(S1W-5444)

Sarah Boyack: Midlothian Council was awarded £2.5 million capital consent from the Transport Challenge Fund in 1997 to assist with the development of a procurement option for the A701 New Milton to Straiton project under the Private Finance Initiative. In 1999 the Council decided to finance the project by way of conventional procurement methods.

9 March

Richard Lochhead (North-East Scotland) (SNP): To ask the Scottish Executive whether it intends to examine the implications of Private Finance Initiative projects commissioned by the water authorities for charges for water and sewerage customers.
(S1W-1505)

Sarah Boyack: PFI projects in the water and sewerage sector are essential schemes needed to meet the requirements of the Urban Waste Water Treatment (Scotland) Regulations 1994. This investment is therefore unavoidable and it is for the authorities to achieve a value for money solution. The water authorities in these cases consider PFI the most appropriate means of implementing these schemes, through a process of competitive tendering. These costs are a factor the Water Industry Commissioner will take into account in providing advice on future charges.

10 March

Mr Gil Paterson (Central Scotland) (SNP): To ask the Scottish Executive whether it will detail the number and value of water supply assets currently owned by the private sector through Private Finance Initiative or Public Private Partnerships, and the number and value of water supply assets publicly owned in respect of (i) East of Scotland Water (ii) West of Scotland Water and (iii) North of Scotland Water.
(S1W-4030)

Sarah Boyack: There are no PFI schemes relating to the supply of drinking water.

10 March

Mr Gil Paterson (Central Scotland) (SNP): To ask the Scottish Executive whether it will detail the number and value of sewerage assets currently owned by the private sector through Private Finance Initiative or Public Private Partnerships, and the number and value of sewerage assets publicly owned in respect of (i) East of Scotland Water (ii) West of Scotland Water and (iii) North of Scotland Water.
(S1W-4031)

Sarah Boyack: There are nine PFI waste-water schemes currently being developed on behalf of the Scottish water authorities. The value of these schemes is a matter for the PFI contractors but the equivalent capital cost by conventional procurement would be around £600 million. Water authorities are currently conducting studies of their above and below ground assets comprising water and waste-water treatment works etc and the mains network of pipes supporting them. In his advice on charges, the Water Industry Commissioner gives an estimate that the replacement value of the water authorities' assets could be up to £16 billion.

Richard Lochhead (North-East Scotland) (SNP): To ask the Scottish Executive how much planned investment in the water industry, based on currently available investment projections and expressed in both percentage and monetary terms, will be financed through (a) the Private Finance Initiative and (b) traditional procurement.
(S1W-4129)

Sarah Boyack: For the period of the strategic review, 2000-01 and 2001-02, water authorities plan to invest around £930 million in water and sewerage infrastructure. In addition to this the water authorities will procure some major sewerage services through partnership schemes with the private sector. It is very difficult to make an assessment of the capital costs of PFI schemes - that is a matter for the PFI contractors themselves - but our best estimate would be around £375 million, around 28% of the total investment required for the same period

Richard Lochhead (North-East Scotland) (SNP): To ask the Scottish Executive what percentage of water industry infrastructure it estimates will be privately owned by the end of the current session of the Parliament.
(S1W-4130)

Sarah Boyack: It is very difficult to place a value on the extensive network of above and below ground assets held by the water authorities. In his advice on charges, the Water Industry Commissioner gives an estimate that the replacement value of the water authorities assets could be up to £16 billion. Our projection of PFI capital investment by the end of 2002 is around £0.6 billion, by which time all currently planned projects will have been completed.

03 April

Lord James Douglas-Hamilton (Lothians) (Con): To ask the Scottish Executive whether the details provided to it regarding Midlothian Council's proposals for the A701 in the notice of intention to develop described the project as a Private Finance Initiative/Public Private Partnership project.
(S1W-5448)

Sarah Boyack: No.

10 April

David Mundell (South of Scotland) (Con): To ask the Scottish Executive whether it recognises difficulties which local authorities can face in developing Public Private Partnerships for improvements to rural schools and whether it is taking any steps to address this situation.
(S1W-5614)

Peter Peacock: Public Private Partnerships can provide an appropriate means of securing improvements in the school stock across a range of circumstances. Such partnerships will not, however, necessarily be suitable in all situations, and local authorities continue to have substantial resources available to them under the traditional capital allocation arrangements. The suitability or otherwise of Public Private Partnerships will be influenced by a number of factors relevant to particular proposals and geographical considerations need not be dominant. Public Private Partnership proposals involving a number of schools in rural areas are currently being progressed. We continue to work with authorities to support their consideration of Public Private Partnerships where they express interest in taking them forward.

20 April

Michael Russell (South of Scotland) (SNP): To ask the Scottish Executive whether any financial backing from it for a Larkhall rail link will be subject to the conclusion of a Public Private Partnership.
(S1W-6089)

Sarah Boyack: A condition of all PPP projects is that they should be able to demonstrate value for money. Consequently, the Scottish Executive's funding of £5 million from the 1998 Transport Challenge Fund towards the cost of the Larkhall to Milngavie Rail route and the level playing field support of up to £2.26 million per annum, for which the project may be eligible as part of the PPP arrangements, depends upon value for money being demonstrated satisfactorily in the full business case for the project which the Strathclyde Passenger Transport Authority is still preparing.

Mr Murray Tosh (South of Scotland) (Con): To ask the Scottish Executive how the Public Private Partnership (PPP) proposed for the A77/M77 upgrade (Malletsheugh-Fenwick) will differ from that used for the Paddy's Rickle Bridge-Cleuchbrae phase of the M74 and whether the A77/M77 PPP is intended to include operation and maintenance of any other section of the A77/M77 corridor than that to be constructed.
(S1W-6054)

Sarah Boyack: Decisions have yet to be taken on the nature and extent of the proposed Public Private Partnership and the extent of the scheme.

28 April

Andrew Wilson (Central Scotland) (SNP): To ask the Scottish Executive what the undiscounted cost to the Scottish budget is of servicing each PFI contract which the Executive and its predecessors have entered into over the entirety of each contract, in total and by each contract agreed.
(S1W-5682)

Mr Jack McConnell: The Scottish Executive has three PFI contracts for which it is responsible. They are:

• Skye Bridge
• M6 DBFO
• Kilmarnock Prison.

The Scottish Executive does not make service payments for Skye Bridge.

The undiscounted cost of the PFI service payments (i.e. revenue commitments) in cash terms, excluding VAT and rounded to the nearest £ million for M6DBFO and Kilmarnock Prison are

The total undiscounted commitment for M6 DBFO is £705 million. The total undiscounted commitment for Kilmarnock Prison is £454 million

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