ROSEMARY Curtis's interesting interview with York's Private Finance Initiative (PFI) project manager, Damon Copperthwaite, about three York primary schools to be built by the Sewell Group, answered many questions but raised new ones (March 24).

Mr Copperthwaite supports school building by PFI largely because it transfers risk from the council to a private company. He even claims that "by entering into a PFI agreement the provider takes on all the risk".

This has certainly not been so in the past. PFI expert Prof Allyson Pollock has written that no risks are transferred to the provider unless specified in the contract, with enforceable financial sanctions. Several councils have already paid dearly for failing to foresee and specify all risks.

Nor, in practice, do risks always stay transferred. True, the Sewell Group, in return for 25 years' risk-free and inflation-proofed income from York's education budget, will have numerous obligations to deliver.

But what if they can't?

Companies failing to deliver have regularly used this as a reason to renegotiate their PFI contract - upwards. Because they have councils over a barrel they often succeed. Alternatively, Sewell may have to reconsider their promise not to seek alternative uses for schools outside teaching hours.

Finally, if Sewell goes bankrupt or withdraw, York carries the can since PFI contracts, as I understand it are, technically speaking, not with the PFI company, but with a "special purpose vehicle", for which that company is not financially responsible.

I have no reason to mistrust the Sewell Group, and hope they will serve York well. If my information is wrong or outdated, I trust Mr Copperthwaite will correct me. But, so far, I'm wary of his claim that Sewell will bear all the risks of the York schools' PFI contract, and York's citizens will bear none.

John Heawood,

York PFI Watch,

Eastward Avenue,

Fulford, York.

Updated: 10:22 Wednesday, March 31, 2004