The flagship Lloyd George Avenue scheme in Cardiff Bay, built under the controversial Private Finance Initiative, will cost taxpayers’ £189m over 25 years, it has been revealed.
The information obtained by Leanne Wood prompted the Plaid AM for South Wales Central to renew her call for the Welsh Government to give a firm commitment to extend a ban on PFI’s in the Welsh NHS across all devolved areas of spending.
The Lloyd George PFI scheme when it was completed almost 11 years ago involved the construction of the dual carriageway including Callaghan Square, maintenance of Lloyd George Avenue and the highway around Callaghan Square for 25 years and the provision of not less than 365,000 sqft of commercial development and 350 homes.
But Treasury figures obtained by Leanne Wood show that the final bill to the taxpayer will be £188.8m. The amount to be paid back annually was originally £5.18m a year, subject to indexation, over 25 years. The current annual payment is currently £7,201,138, according to a Freedom of Information request.
Cardiff council said the costs to be financed to the end of the project totalled £56.63m. In addition, the developers have maintenance costs of £19.69m and operating costs of £7.86m making a total of just over £84m. Maintenance will revert to Cardiff council in 2025.
The PFI agreement by the former Cardiff Bay Development Corporation with the scheme was the City Link consortium with its shareholders Societe Generale and MEPC. Now the current equity holders are Vinci Pensions Ltd, Laing Road plc and PFI Investors.
Assembly Member for Carmarthen East & Dinefwr and Plaid Cymru spokesperson for Local Government, Rhodri Glyn Thomas, has called on the Welsh Government to adopt innovative funding methods for public infrastructure projects after freedom of information requests show local authorities in Wales will pay almost £1.4billion in Private Finance Initiative (PFI) contracts – representing over £40million annually being diverted from public services.
Earlier this year Leanne wrote to First Minister who told her that the Welsh Government were “actively pressing the UK Government urgently to allow the Welsh Government to borrow to finance capital investment”. “And, although ancillary to securing borrowing ability, we are also committed to exploring other innovative and collaborative means to raise finance for investment in infrastructure in ways which provide value for money”.
Plaid’s Build4Wales proposal would create a not-for-distributable-profit company to create up to 50,000 jobs by investing as much as £500 million in building new schools, hospitals and roads, creating thousands of much-needed jobs.
Leanne Wood said: “These figures on the Lloyd George Avenue scheme illustrate clearly the folly of PFI’s schemes. Here we have a project which will cost almost £189m – the private investors will make a huge multi-million pound profit while the taxpayers pick up the bill.
“PFI is unaffordable and just shifts millions of pounds of debt to future generations and that is wrong. The Welsh Government must resist this false economy and commit not to carrying out any further PFO’s in the future. They are unsustainable.”
