New help has been issued to streamline private finance initiative (PFI) projects.It aims to speed up negotiations, offer savings on advisers’ fees, consistent pricing of types of contracts and common understanding of the main risks.
The government has welcomed the launch of revised guidance, which it says it will cut costs for public and private sectors alike and speed up delivery of new and improved public services.
The guidance comes from Partnerships UK, a Public-Private Partnership (PPP) which works with public bodies to support and develop their PFI and PPP projects. It has been produced following consultation, on behalf of the Office of Government Commerce.
The revised guidelines build on existing standardised guidance first published in 1999. Using standard terms speeds up the negotiation process and allow the private and public sectors to avoid ‘re-inventing the wheel’ on each contract and thus to focus on the bottom line – delivery of improved facilities and services for the public.
New or improved clauses have been included that cover a number of aspects of a PFI contract e.g. insurance, planning risk, assignment, early termination and performance measurement; all technical issues where standardisation allows a better focus on delivery. Under the new refinancing terms the public sector secures half the gains.