New Treasury rules limit private investors' profit on refinancing to 30%
Construction firms investing in PFI projects will face curbs on their profit under new rules put in place by the Treasury.
The rules, which came into force at the weekend, relate to the refinancing of PFI projects. In future, private sector investors will receive only 30% of any profit on refinancing, compared with 50% previously. The new terms apply to any net gains over £3m, when projects are refinanced.
The rules will apply to about 200 projects in the pipeline, worth £26bn in total. The changes, which have been developed over the past fortnight, have been seen as the government using the credit crunch to attract better terms on PFI for the public sector.
