Octagon Healthcare's PFI Refinancing
Octagon Healthcare Ltd has today completed the refinancing of the Norfolk and Norwich University Hospital. The refinancing will release significant resources for the NHS in central Norfolk.
The refinancing will give the Norfolk and Norwich University Hospital NHS Trust £33.9 million to be taken as a reduction in fees paid to Octagon by the Trust amounting to £1.7 million a year for the next three decades.
In addition to the £33.9 million saving delivered by refinancing, the Trust has also extended its initial contract with Octagon from 30 to 35 years. This extension will mean a further reduction of £1.8 million in the annual cost of the contract over the next 30 years due to a reprofiling of the payments.
Trust chairman David Prior said: “We have all worked very hard to secure the best possible value for the NHS in Norfolk. These savings will now go some way towards helping put the NHS finances in central Norfolk on a better footing.”
Octagon Chairman Richard Jewson said: “We are pleased that the refinancing has been signed. Both parties have worked together to implement the refinancing in complete accordance with the Government's guidelines and both of us will now benefit accordingly.”
The construction of the Norfolk and Norwich University Hospital was completed in September 2001, twenty weeks ahead of schedule, and on budget.
Notes for Editors
PFI refinancing gains should be split between the private consortia and the public sector, according to rules stipulated by the Office of Government Commerce (OGC), on a 70/30 basis.
Prior to the publication of the guidelines, the trust was not entitled to any share and this represents a windfall gain to help increase the quality and range of healthcare to the people of central Norfolk.
The refinancing was completed totally in accord with the OGC guidelines.