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9
WQ.77/2018
WRITTEN QUESTION TO THE MINISTER FOR TREASURY AND RESOURCES
BY SENATOR P.F.C. OZOUF
ANSWER TO BE TABLED ON MONDAY 9th APRIL 2018
Question
In respect of the new hospital project, will the Minister set out in a table the following information, broken down by each year of the project and including all types of costs?
- The total funds required for the project;
- The source (of any type) of the funds described in (a);
- The latest planned year for borrowing to be incurred (i.e. bond proceeds taken);
- The imputed year-end balances of such borrowing over the project lifetime;
- The coupon or borrowing costs;
- The expected, or assumed, returns from the balances of funds in hand not yet drawn or expected to be built up before repayments; and
- Withdrawals from, or allocations to, the Strategic Reserve and the new hospital fund?
Answer
- The overall project cost will need to be contained within the £466m in order to rely upon the approval made by the States Assembly under P107/2017. This is currently being verified.
- Once that assumption is verified, the funding source will be as described in P.107/2017 i.e. a blended solution with up to £275 million by means of borrowing, £23.6 million for budget previously allocated and the balancing amount from the Strategic Reserve Fund.
- No formal Ministerial decision has been taken as to when any borrowing will be incurred. The latest planned year for borrowing is the current year.
- Until the duration and quantum of any borrowing is decided, this is subject to the decision required in part c of this answer and to market conditions.
- The costs are subject to the decision referred to in part c of this answer.
- After consultation with the independent investment advisers for the States, an assumed long term return of the Strategic Reserve is RPI(Y) + 2%. For prudent modelling purposes a lower level of return, 1%, is assumed for any balances held in hand.
- Any sums borrowed will be paid into the Strategic Reserve Fund and will remain there and transferred into the Hospital Construction Fund in line with specified trigger points in a cash-flow funding statement provided from the Department for Infrastructure once that cash-flow is known.