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Ministry of Defence

Answer

Alan Simpson: To ask the Secretary of State for Defence what contractual steps his Department plans to take to prevent (a) private finance initiative and (b) public private partnership partners from selling on their stakeholding. [184665] Mr. Caplin: In common with other government departments, the Ministry of Defence does not seek to restrict unnecessarily the shareholders in Private Finance Initiative (PFI) and Public Private Partnerships (PPP) projects from transferring or selling their equity stakes to another commercial entity. Such restrictions would constrain the availability of capital for such projects and therefore adversely affect value for money. Exceptions to this can be made during the construction/ introduction to service phase when some restrictions may be placed on sales or transfers of equity from shareholders who are also key subcontractors, as these might have an adverse impact on the success of the project. Additionally, provisions are usually included in MOD PFI and PPP contracts which place an obligation on the service provider and its shareholders to obtain the MOD's consent to any sale or transfer. This is to prevent any transfer that might be prejudicial to the national interest, e.g. for reasons of national security.

Secondary information

Type

Written question

Reference

424 c717-8W;424 c719-20W; 184665

Session

2003-04

Subjects

Contracts Private sector Private finance initiative Public private partnerships Ministry of Defence Sales

Link

View this Written question on www.publications.parliament.uk