In 2011, the independent researchers Jim and Margaret Cuthbert showed the
scale of the returns to investors when they analysed three hospital contracts
for Hereford Hospital, the Edinburgh Royal Infirmary, and Hairmyres in East
Kilbride.2 Shareholders are predicted to make truly astronomical gains. Equity
of just £100 invested in rebuilding Hairmyres Hospital is projected to
earn £89 million in dividends over 30 years, while half a million pounds of
equity in the new Edinburgh Royal Infirmary is expected to win dividends
of £168m and a £1,000 equity in Hereford will yield £555.7m. These high
rewards are contractually protected and underwritten by government. The
Cuthberts’ analysis of internal financial projections for six PFI schemes show
investors are expecting to recoup 12 times more than they invested. The UK
Government has ignored these findings and there has been no major enquiry.
Using investors’ own projections, the Cuthberts calculated how much profit
was predicted from the six schemes and found that £42m of “subordinate debt”
invested by the companies building the six schemes was predicted to yield £517m. The profits on the £717,297 put in as equity by shareholders were projected to reach £350m.