PFI FAQs

One practically inevitable fact of life is that when drafting contract terms for complex projects and services, the less clear your understanding is of the requirements of the project, the greater the chance of poor contractor performance behaviours. Two cases…

The Client-Side PFI Manager is the person in the client organisation with direct responsibility for managing the operational PFI contract. The management of operational PFI contracts consists of frequent, ad hoc and periodic activities. Frequent activities are those that need…

In this article we explain the why, what and how of the PFI Operations Manual – the cornerstone of effective and consistent day to day contract management. The typical length of a PFI contract (20-30 years), makes it extremely unlikely…

The day to day pressures of managing a PFI contract tends to lead one to focus on operational issues, yet the importance of devoting considerable time and energy to keeping on top of PFI costs cannot be undervalued. Take a…

The clue is in the name – private finance is at the heart of PFI. It is what distinguishes PFI from other forms of contract and other ways of providing public assets. What this means, in practice, is that whoever…

The complexity and length of PFI contracts and the upward pressure on the unitary charge (due to inflation, the cost of contract variations and the contractors’ desire for profit, among other things) mean that multi-million pound deficits can accumulate if…

PFI indexation, as with other issues affecting affordability, is inextricably linked with the operational side of the contract, so those responsible for PFI contract management must take responsibility for dealing with indexation, and not leave it just to the finance…

The payment mechanism is the primary means for ensuring a PFI contractor performs. PFI contracts distinguish between ‘Availability’ and ‘Performance’ and to control costs, it is therefore essential that clients keep track of Availability and Performance deductions in PFI contracts.…

The need to control PFI costs is of paramount importance to any public sector organisation, yet often those responsible for PFI finance and the contract arrangements can work ‘in silo’ creating (inadvertently) a lack of cost control. Collaborative working, therefore,…

With HM Treasury now allowing procuring organisations to keep all the savings they achieve from effective management and the realignment of PFI contracts, this provides an ideal opportunity for you to review the governance, structure and scope of your operational…

The PFI monitoring calendar is an essential tool for you, as the client, to stay on top of the responsibilities of your PFI contractor and its sub-contractors, as well as your own responsibilities. In this article we focus on how…

Although it sounds like a mundane issue, a good PFI document management and filing system is an essential tool for effective contract management. The need for an efficient filing system for management of any complex contract should be self-evident; however,…

The thought of attending yet another meeting with your PFI contractor may seem like a pointless chore… you may feel that there’s too much talk and too little action by your contractor thereafter. Yet, there are ways in which you…

Contractor responsibility for the PFI life cycle of the assets is a fundamental principle in PFI contracts. The related costs form a significant element in the unitary charge. Ensuring that the PFI life cycle programme is well managed and meets…

In PFI assets with considerable public or end user traffic, such as libraries, leisure centres, schools, offices and prisons, there is a high risk of regular incidents of vandalism and other types of damage caused by client-related parties. The costs…

Our focus is on operational PFI Contracts: How to get the most from partner changes. With most PFI contracts having an average lifespan of 20 to 30 years, it is inevitable that some of the parties will change during that…