INVESTORS behind a private finance initiative (PFI) contract used to build Hexham General Hospital in Northumbria in 2002 will be bought out of their contract by the local NHS trust.
Northumbria Healthcare NHS Foundation Trust is on the verge of securing a £115m loan from the local council, Northumberland county council, to effectively refinance the private finance contract, which was projected to cost the trust £249.1m until the contract expired in 2033.
Part of the money will be used to terminate a deal with the consortium behind the contract, Consolidated Investment Holdings, ending the deal on 1 October.
It will mean the trust will repay the council for the loan but at the lower public sector rate, which the trust hopes will slash its borrowing costs and save the trust £3.5m a year.
The deal would be the first of its kind in the country, and could pave the way for more deals to be struck by councils, the NHS and private investors to end PFI contracts despite concerns over costs to the public purse.