Firms make millions after stake in Mid Yorkshire Hospitals PFI scheme is sold offshore

Balfour Beatty has become the second firm to rake in a profit from the hospitals after selling its 50 per cent interest to an offshore company for £61.5m, it was announced on Thursday.

The global infrastructure company built Pinderfields and Pontefract hospitals as part of a finance deal with Royal Bank of Scotland (RBS).

The Private Finance Initiative (PFI) arrangement meant the hospitals were to be leased back from the companies by Mid Yorkshire Hospitals Trust over 35 years.

As part of the deal, both firms took a 50 per cent stake in the PFI scheme, which has left Mid Yorkshire Hospitals Trust with millions of pounds in repayments every month.

Balfour Beatty said the sale “exceeded” its expectations, and confirmed its profit was £42.2m.

The buyer was HICL Infrastructure Investments, a company originally set up by HSBC bank which is registered at St Peter Port, Guernsey.

Companies in the channel island are not subject to UK tax laws.

HICL now owns 100 per cent of the PFI scheme after RBS sold its 50 per cent share to the company in 2011.

Accounts for RBS’s subsidiary Royal Bank Project Investments say its company made a “significant profit” of almost £6.2m from the sale that year.

Since the new Pinderfields and Pontefract hospitals were built in 2011, Mid Yorkshire has run into financial problems and is currently around £17m in debt.

Redundancies and pay cuts have been made to slash millions of pounds from Mid Yorkshire’s budget to balance the books.

Mid Yorkshire said it did not benefit financially from the sale, which would not lead to any change in the way the hospitals are run.

HICL confirmed it was registered in Guernsey but said the financial vehicle it used for buying PFI schemes was incorporated in the UK and paid tax in this country.