Private firms poised to make another £1bn from building NHS hospitals
Firms made pre-tax profits of £831m under private finance initiative in past six years, with figure to more than double by 2022
PFI contracts have proved controversial because they are much more expensive than the traditional method of public borrowing. A private company called a special purpose vehicle is set up and borrows money from the private sector to build a facility, such as a hospital, which it leases back to the public body in exchange for annual payments, known as unitary charges. In the case of the current 125 health PFI projects, the average payment term is 31 years. The CHPI says the capital value of the assets that have been built under the contracts is £12.4bn but the NHS will pay about £80bn for their use.