A Private Finance Initiative (PFI) is a long-term contract between a private party and a public entity whereby the private sector designs, builds, finances and operates a public built asset (with related services) and in exchange, the end user pays a fee (remuneration linked to performance) for a prescribed amount of time until the asset is eventually handed over to the public entity.
It is estimated that in the next ten years, over 200 PFI contracts are due to expire in the UK and the Infrastructure Projects Authority (IPA) has stressed the criticality of ‘early’ hand-back planning. In February 2022 the IPA published its practical guidance “Preparing for PFI Contract Expiry” which applies across all sectors.
How can RBA help?
Having successfully completed one of the first hand-back survey for one of Europe’s largest PFI contracts, RBA can provide professional consultancy services, surveys and support throughout the hand back process. This can be on behalf of the public entity, the Special Purpose Vehicle (SPV)/Management Company or both depending on the contract specifics.
We understand the unique nature and requirements of this type of project and the many issues that can be avoided with the correct planning and advice. Equally, as the project reports are understandably scrutinised by all parties to determine liability and costs, we also understand that the need for the highest level of quality, detail and evidentiary support is critical to the success of the process. RBA can confidently offer this along with our extensive experience to guide clients through this delicate and complicated process.
As an additional note, PFI contracts traditionally require a final assessment survey 24-18 months before contract expiry. The IPA consider this to be too late and from experience, RBA agrees with this assessment. They recommend an additional survey five years before contract expiry as, in complex projects, it takes considerable time to complete the survey, resolve any disputes between the parties and to undertake the identified works.
Ready to discuss how our expertise can benefit your next project?
