PFIs can be notoriously difficult to manage due to having to navigate not just deeply complex contractual provisions, but multiple legions of stakeholders, financiers and shareholders. Practical challenges include:
- A lack of practical cost transparency, despite open book accounting provisions
- Highly complex contractual and finance structures
- Misunderstandings over how to articulate value for money; it’s seen politically as a ‘bad thing’
- Termination processes are highly complex due to the financing structures in place
- Escalation of poor performance can be turgid due to the governance processes in place
- A lack of transparency over service performance and complex service monitoring processes
- Service costs are often much higher, but the contractor is taking the risk on service delivery levels
- A lack of support from the ‘TopCo’ who is supposed to be representing the client and contractor in a balanced manner, but often sides with the prime contractor.
