The consortium behind the £2bn Colchester Garrison contract will retain ownership of the land for 150 years, even though its contract with the Ministry of Defence will last only 35 years.
Critics have seized on the deal as further evidence that PFI provides greater benefits for the private than public sector, accusing the MoD of “selling the family silver”.
Some early PFI deals in the 1990s gave ownership of asset and land to the private sector after the contract had been completed but this has not been the case in recent years. The RMPA consortium, which comprises Sir Robert McAlpine, Atkins, Sodexho and HSBC Infrastructure, reached financial close on the project in 2004, but it was made preferred bidder in 1999.
A spokesman for the Public and Commercial Services Union, which represents the civil service, said: “What the MoD has done is throw in a sweetener for the consortium. They are potentially selling off the family silver, and this throws up major accountability issues.”
Allyson Pollock, a professor of public health policy at the University of Edinburgh, and a longstanding critic of the PFI, said: “Basically they have handed over the property rights for 150 years, which is extraordinary and raises real questions for future generations and democratic accountability.”
Mark Bielecki, the army’s project leader on the barracks, defended the deal on the grounds that the MoD could buy back the land for a fixed amount, index linked to inflation, with a “not unreasonable” profit for RMPL.
He added that the use of the PFI would mean that the barracks would be built in five years rather than 18.