The aim of PFI financing is to share costs and remove from the government’s balance sheet the debt associated with large projects such as hospitals; however, it can be costly for the public sector because projects are financed with private debt and equity, which is significantly more expensive than public borrowing. Governments also pay private contractors an annual charge, running for decades and usually indexed to inflation, to cover the capital repayment plus interest and maintenance costs. So exclusive PFI contracts in effect create monopoly licences. The end result can be one where the
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