Private finance initiative: firearms & public order training facility - update

Report: 21
Date: 19 June 2001
By: Commissioner

Summary

This report is for information, and confirms details of the Private Finance Initiative for the Firearms and Public Order Training Facility (FPOTF) contract signed on 11 April 2001.

A. Recommendation

Members are invited to note the report.

B. Supporting information

1. The Private Finance Initiative (PFI) contract with Equion for a Firearms and Public Order Training Faciliity (FPOTF) t Gravesend was formally signed by the Clerk on Wednesday 11 April. This is the first PFI signed on behalf of the MPA and MPS.

2. Work began on site the following week. Construction should be complete by January 2003. Payments will commence upon occupation.

3. The contract was structured to automatically incorporate Milton Ranges - land adjacent to the former Sea Training College - once a lease could be concluded with its owners, the Royal Society for the Protection of Birds. This was not expected prior to signing the contract. However final agreement was eventually achieved to coincide with the signing and the ranges are now an integral part of the service to be provided through this contract.

4. Planning permission had already been obtained. Amendments to clarify certain conditions to ensure long term certainty (eg: location for noise level measurements) were sought and were formally approved by the local Planning Authority Committee on 18 April 2001 following public consultation. Local authority approval has also been obtained to the management plan for the site.

C. Financial implications

The prevailing swap interest rate agreed for inclusion in the contract was 5.6725 per cent, which is below the rate of 5.76 per cent included with the bid when the MPA authorised its acceptance. The annual fixed payments have therefore reduced (to £5.139m per annum from £5.144m per annum at April 1999 prices); to this must be added the variable changes and consumables as stated in the report to the meeting of the Authority on 8 March 2001.

KPMG (on behalf of District Auditor) has advised that the contract should result in the costs of the project being "off balance sheet" and therefore not count against the MPA's capital allocation. Based on the documentation available to them, an assurance has also been provided by the Inland Revenue that stamp duty should not be incurred on the property transactions.

D. Background papers

None.

E. Contact details

The author of this report is Trevor Lawrence, Director of Property Services.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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