I REFER to PFI (Profitable Fundholder Income?). No, PFI actually stands for Private Finance Initiative, a way of funding public projects - hospitals, schools, roads etc - using private company capital and expertise which is then paid for, usually over 25-30 years, by public funds. In other words, taxes.

The Government pays current debts out of current income.

The whole sorry business of building the new hospital in Worcester was a PFI project and it also included the decision to downgrade Kidderminster General Hospital.

I have done a cash-flow calculation covering capital repayment, interest charges and return on capital (including good dividends for PFI company shareholders) and come up with a repayment by us of about £540 million.

All the PFI contracts agreed and signed up to September , 2001 indicate £20 billion of projects are underway. Assuming the pay-back is similar to that for Worcester Hospital then we are paying £100 billion over 30 years.

That is equivalent to £1,650 over 30 years, for each man, woman and child in the UK but, as the working population pay most of the taxes it is they who are now paying about £3,300 each over 30 years for current projects.

The Government is pressing on with PFI so that these figures will continue to grow. The alternative to PFI is for the Government to fund projects, using PFI company expertise and paying the money up front so that the NHS then owns and runs the facility.

I have calculated that to build the Worcester hospital in this way would have cost about £200 million - a saving of 63 per cent.

Up to September 1, 2001, 460 PFI contracts had been signed with a value of £20 billion. But the PFI companies will receive about £100 billion over 25-30 years.

If my calculations for Worcester Hospital are applied here, the amount to pay would only be about £40 billion.

If the Government stopped the PFI initiative now, it could revert to the sane system of paying for what we could afford - say an extra £50 per year, per worker, yielding £45 billion over 30 years.

This would finance the starting of 520 projects at the current average of £43 million (£86 million pay-back) per project

As a matter of interest, the car parking charges at the new Worcester hospital will probably amount to £10 million over 30 years. Who receives this revenue?

TONY BRIGHT

Comberton Avenue

Kidderminster