MoD PFI Projects, the most recently delivered probably being Colchester, with ALLENBY/CONNAUGHT (SPTA) in progress, and DTR (St Athan) just signed off, deliver both Hard (buildings/grounds) and Soft (catering, security, tpt etc) services. Key features of these projects are: Capital expenditure (eg the cost of building) is generally funded through a private consortium, with perhaps some trade off in terms of land transfer, (from MoD to the contractor to build private housing etc) being used to offset this. Through-life expenditure (eg the cost to maintain and refresh the buildings and provide the soft services throughout the life of the contract) is funded through (generally) monthly payments from MoD to the contractor - in other words a mortgage payment. They are generally fully serviced contracts (we occupy the buildings, the contractor owns and services them, and provides all the aforementioned soft services). As Lord Drayson and his merry crew know only too well from their procurement experiences, the initial capital cost of a project comprises about 10% of the total whole life costs of a project. Crucially, the support (services) element costs about 90%, and it is this that we pay little by little each month, over a very long period of time, in order to maintain the contract. You might argue, therefore, that it is the contractor who is taking the least risk and most gain, with the opposite pertaining for the MoD. Putting that to one side, however, the fact remains that, because the Treasury is unwilling to commit capital expenditure to replace ageing infrastructure, we are taking a huge risk on our ability to sustain the military machine into the future. That is not to say PFI does not bring huge immediate benefits, providing modern fit for purpose barracks and facilities in a relatively short period of time, ones that are guaranteed to be serviced and maintained properly over their life span. Why the risk however? Because these long-term contracts, with the profit element for the contractor, have to be serviced (ie mortgage paid) for the life of the contract. This is all well and good at the moment but as the economy tightens, and the Treasury gets tough in future spending rounds, efficiencies (cuts) will have to be found. The sting in the tail is from where these cuts are to be made. We cannot take from the PFI pot - it is ring-fenced. Other Govt depts are going to be struggling just as equally, some with their own PFI crocodiles. That leaves only three options - pay, equipment, and infrastructure outside of the PFI arena. So back to the question? Is our feeding frenzy at the PFI table really worth it, or are we really bringing forward future expenditure to make ourselves comfortable, and consigning our successors to a period of famine?