To brief the Audit and Governance Committee on the status of the Energy from Waste (EfW) loan arrangement commenced on execution of the waste PFI contract variation in May 2014, following approval to proceed with the variation by Cabinet in December 2013.

The Chief Financial Officer introduced the report which provides a briefing on the loan arrangement relating to the waste PFI contract variation in May 2014. The loan is managed through the Audit and Governance Committee with revised terms of reference.  Herefordshire and Worcestershire are working together, each having its own committee but the same risk register.

The Vice Chairman asked about the loan balance and how this would be repaid when the contract ends. The head of corporate finance explained that this would be through a bullet mechanism in the cash flow with the 25% ownership being returned at the end of the PFI arrangement. The valuation would not be based open market values but on a prudent tax valuation, meaning that the expected return would be in excess of the valuation.

RESOLVED:

that the report be noted.