Appendix 2 - Comparison of PFI with borrowing under the
Prudential Code.
1. Prudential Borrowing Approach
If the Council were to carry
out necessary investment and on-going maintenance work in-house at a level
sufficient to maintain the network in ‘fair’ condition, then cash flows over
the next 25 years are estimated as follows:
|
|
Initial investment |
On-going capital |
Revenue |
Outstanding borrowing |
Capital Financing |
Revenue cost |
Existing LTP budget |
Other budgets |
Deficit |
Cummulative deficit |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
1 |
33.084 |
0.000 |
6.160 |
33.084 |
0.993 |
7.153 |
2.563 |
6.246 |
-1.656 |
-1.656 |
|
2 |
33.911 |
0.000 |
6.314 |
65.672 |
4.286 |
10.600 |
2.627 |
6.402 |
1.571 |
-0.084 |
|
3 |
34.759 |
0.000 |
6.472 |
97.804 |
7.531 |
14.003 |
2.692 |
6.562 |
4.749 |
4.664 |
|
4 |
35.628 |
0.000 |
6.634 |
129.520 |
10.732 |
17.366 |
2.760 |
6.726 |
7.880 |
12.544 |
|
5 |
36.519 |
0.000 |
6.800 |
160.858 |
13.892 |
20.692 |
2.829 |
6.894 |
10.969 |
23.513 |
|
6 |
0.000 |
6.595 |
6.970 |
161.019 |
16.091 |
23.060 |
2.899 |
7.067 |
13.094 |
36.607 |
|
7 |
0.000 |
7.273 |
7.144 |
161.851 |
16.127 |
23.271 |
2.972 |
7.243 |
13.056 |
49.663 |
|
8 |
0.000 |
7.454 |
7.322 |
162.831 |
16.215 |
23.537 |
3.046 |
7.425 |
13.066 |
62.729 |
|
9 |
0.000 |
7.641 |
7.506 |
163.959 |
16.317 |
23.822 |
3.122 |
7.610 |
13.090 |
75.820 |
|
10 |
0.000 |
7.832 |
7.693 |
165.232 |
16.434 |
24.127 |
3.200 |
7.800 |
13.127 |
88.946 |
|
11 |
0.000 |
7.955 |
7.885 |
166.579 |
16.564 |
24.449 |
3.280 |
7.995 |
13.173 |
102.120 |
|
12 |
0.000 |
8.154 |
8.083 |
168.070 |
16.703 |
24.785 |
3.362 |
8.195 |
13.228 |
115.347 |
|
13 |
0.000 |
8.358 |
8.285 |
169.705 |
16.856 |
25.141 |
3.446 |
8.400 |
13.294 |
128.642 |
|
14 |
0.000 |
8.567 |
8.492 |
171.484 |
17.024 |
25.516 |
3.532 |
8.610 |
13.373 |
142.015 |
|
15 |
0.000 |
8.781 |
8.704 |
173.406 |
17.206 |
25.910 |
3.621 |
8.825 |
13.464 |
155.479 |
|
16 |
0.000 |
8.919 |
8.922 |
175.389 |
17.400 |
26.322 |
3.711 |
9.046 |
13.564 |
169.043 |
|
17 |
0.000 |
9.142 |
9.145 |
177.516 |
17.603 |
26.747 |
3.804 |
9.272 |
13.671 |
182.714 |
|
18 |
0.000 |
9.371 |
9.373 |
179.786 |
17.820 |
27.193 |
3.899 |
9.504 |
13.790 |
196.504 |
|
19 |
0.000 |
9.605 |
9.608 |
182.199 |
18.051 |
27.659 |
3.997 |
9.742 |
13.920 |
210.425 |
|
20 |
0.000 |
9.845 |
9.848 |
184.756 |
18.297 |
28.145 |
4.097 |
9.985 |
14.063 |
224.487 |
|
21 |
0.000 |
9.999 |
10.094 |
187.365 |
18.554 |
28.648 |
4.199 |
10.235 |
14.214 |
238.702 |
|
22 |
0.000 |
10.249 |
10.346 |
190.119 |
18.819 |
29.166 |
4.304 |
10.491 |
14.371 |
253.073 |
|
23 |
0.000 |
10.505 |
10.605 |
193.020 |
19.099 |
29.704 |
4.412 |
10.753 |
14.540 |
267.612 |
|
24 |
0.000 |
10.768 |
10.870 |
196.067 |
19.393 |
30.264 |
4.522 |
11.022 |
14.720 |
282.332 |
|
25 |
0.000 |
11.037 |
11.142 |
199.261 |
19.702 |
30.844 |
4.635 |
11.297 |
14.912 |
297.245 |
|
|
173.902 |
178.051 |
210.416 |
|
387.707 |
598.123 |
87.529 |
213.349 |
297.245 |
|
2. Private Finance Initiative
Cash flows for an equivalent
PFI project are estimated as follows:
|
Year |
Initial Capital Investment |
Operating costs |
Total Costs |
PFI Tariff |
Existing budgets |
PFI FSS |
Over/ under |
Interest |
Cummul-ative cash flow |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
1 |
30.178 |
7.572 |
37.750 |
10.922 |
9.348 |
16.851 |
-15.277 |
-0.461 |
-15.738 |
|
2 |
28.305 |
7.762 |
36.067 |
14.239 |
9.582 |
16.851 |
-12.194 |
-1.317 |
-29.248 |
|
3 |
29.013 |
7.956 |
36.969 |
17.606 |
9.821 |
16.851 |
-9.066 |
-2.038 |
-40.352 |
|
4 |
29.738 |
8.155 |
37.893 |
21.025 |
10.067 |
16.851 |
-5.893 |
-2.612 |
-48.856 |
|
5 |
30.482 |
8.358 |
38.840 |
24.498 |
10.318 |
16.851 |
-2.672 |
-3.027 |
-54.555 |
|
6 |
0.000 |
14.324 |
14.324 |
30.866 |
10.576 |
16.851 |
3.439 |
-3.187 |
-54.303 |
|
7 |
0.000 |
15.078 |
15.078 |
31.621 |
10.841 |
16.851 |
3.930 |
-3.157 |
-53.530 |
|
8 |
0.000 |
15.455 |
15.455 |
32.000 |
11.112 |
16.851 |
4.037 |
-3.107 |
-52.600 |
|
9 |
0.000 |
15.842 |
15.842 |
32.388 |
11.389 |
16.851 |
4.147 |
-3.048 |
-51.501 |
|
10 |
0.000 |
16.238 |
16.238 |
32.785 |
11.674 |
16.851 |
4.260 |
-2.978 |
-50.219 |
|
11 |
0.000 |
16.588 |
16.588 |
33.137 |
11.966 |
16.851 |
4.320 |
-2.899 |
-48.798 |
|
12 |
0.000 |
17.003 |
17.003 |
33.553 |
12.265 |
16.851 |
4.437 |
-2.810 |
-47.170 |
|
13 |
0.000 |
17.428 |
17.428 |
33.980 |
12.572 |
16.851 |
4.557 |
-2.708 |
-45.321 |
|
14 |
0.000 |
17.863 |
17.863 |
34.417 |
12.886 |
16.851 |
4.680 |
-2.593 |
-43.234 |
|
15 |
0.000 |
18.310 |
18.310 |
34.865 |
13.208 |
16.851 |
4.806 |
-2.463 |
-40.890 |
|
16 |
0.000 |
18.705 |
18.705 |
35.262 |
13.539 |
16.851 |
4.872 |
-2.319 |
-38.337 |
|
17 |
0.000 |
19.172 |
19.172 |
35.731 |
13.877 |
16.851 |
5.003 |
-2.162 |
-35.496 |
|
18 |
0.000 |
19.652 |
19.652 |
36.212 |
14.224 |
16.851 |
5.137 |
-1.986 |
-32.344 |
|
19 |
0.000 |
20.143 |
20.143 |
36.705 |
14.579 |
16.851 |
5.275 |
-1.792 |
-28.861 |
|
20 |
0.000 |
20.646 |
20.646 |
37.211 |
14.944 |
16.851 |
5.416 |
-1.577 |
-25.023 |
|
21 |
0.000 |
21.091 |
21.091 |
37.658 |
15.318 |
16.851 |
5.489 |
-1.344 |
-20.877 |
|
22 |
0.000 |
21.618 |
21.618 |
38.187 |
15.701 |
16.851 |
5.635 |
-1.089 |
-16.331 |
|
23 |
0.000 |
22.159 |
22.159 |
38.729 |
16.093 |
16.851 |
5.785 |
-0.811 |
-11.357 |
|
24 |
0.000 |
22.713 |
22.713 |
39.285 |
16.495 |
16.851 |
5.939 |
-0.506 |
-5.923 |
|
25 |
0.000 |
23.281 |
23.281 |
39.855 |
16.908 |
16.851 |
6.097 |
-0.173 |
0.000 |
|
|
147.716 |
413.111 |
560.827 |
792.736 |
319.302 |
421.272 |
52.162 |
-52.162 |
|