j237504-30.htm
16. Commitments under PFI Contracts
Transport Scotland has entered into the following PFI contracts for the design, build, finance and maintenance of assets reflected on the Statement of Financial Position:
a) M6 (M74) - the contract covers the design, construction and financing of 28.3km of new Scottish motorway along this route, as well as the operation and maintenance of 90km of new and existing Scottish motorway. Payments are made under a shadow toll regime. The toll period began in July 1997 and expires in July 2027.
b) M77 - the contract is a Public Private Partnership (PPP) entered into with East Renfrewshire and South Lanarkshire Councils. The project covers the design, construction, financing and operation of 15km of new Scottish motorway and new 9km local link road between the new motorway and the A726 trunk road. Payments are made under a shadow toll regime. The toll period began in April 2005 and expires in April 2035.
c) M80 - the contract covers the design, build and financing of approximately 18 km of dual two/three lane motorway, together with, but not limited to, associated slip roads, side roads, junctions, structures, culverts and associated works. The contract also incorporates the operation and maintenance of the new motorways, associated structures, and related elements for a period of 30 years after completion of the New Works. Unitary charge payments commenced in September 2011 and will cease in September 2041.
Under IFRIC12 the substance of the PFI contract is that the Agency has a finance lease, with the asset being recognised as a non-current asset of the Agency. Payments under PFI contracts are comprised of two elements - imputed finance lease charges and services charges.
Imputed finance lease obligations under PFI contracts comprise:
| as at 31/03/12 | as at 31/03/11 | |
|---|---|---|
| £'000 | £'000 | |
| Rentals due within 1 year | 39,618 | 19,326 |
| Rentals due within 2 to 5 years | 158,472 | 77,304 |
| Rentals due thereafter | 762,898 | 290,145 |
| 960,988 | 386,775 | |
| Less: Interest element (finance cost) | (491,689) | (186,901) |
| Total capital cost | 469,299 | 199,874 |
| Imputed service charge obligations under PFI contracts comprise: | ||
| as at 31/03/12 | as at 31/03/11 | |
| £'000 | £'000 | |
| Service charge due within 1 year | 35,875 | 23,304 |
| Service charge due within 2 to 5 years | 199,739 | 129,602 |
| Service charge due thereafter | 695,854 | 377,433 |
| Total service charge | 931,469 | 530,339 |
Transport Scotland does not have any commitments under PFI contracts in respect of assets that are not reflected in the Statement of Financial Position.