SUMMARY

PFP-7/E

Private Opportunity, Public Benefit

Chapter 1:
Introduction: the purpose of the PFI

Introduction

Types of PFI projects

Wider policy context of PFI

Benefits of PFI

Box: Generation of additional revenue by sales to third parties

Box: PFI terminology

When to consider PFI

Public sector bodies covered b. this guidance

Other guidance

Chapter 2:
Progress so far

Development in the 1980s

The new policy: the PFI

The PFI and local authorities

PFI projects

Box: Summary of diversity and totality

Diversity (includes lists of some examples in transport, health, etc)

Totality

Chapter 3:
Risk transfer and value for money

Fundamental requirements for a PFI project

Risk transfer

Box: Risks to consider in most PFI projects

Value for money (VFM)

Box: Sources of improved VFM

Chart: PFI projects provide better VFM

Box: VFM some technical points

Public sector comparators

Chart: Public sector comparator and the VFM test

Affordability

Public expenditure treatment of PFI projects

Impact of resource accounting and budgeting

Chapter 4: Practical examples

  1. NIRS2

    Project management and procurement process

    Statement of service requirements and bid evaluation

    The NIRS2 agreement:

    Risk transfer and value for money

    Key elements of the contract

    1. DCMF prisons: Bridgend and Fazakerley

    Project management and procurement process

    Specification of requirements and bid evaluation

    The DCMF prisons deal:

    Risk transfer and value for money

    Key elements of the contracts

    1. Northern Line trains

    Project management and procurement process

    Specification of requirements and bid evaluation

    The Northern Line Trains deal:

    Risk transfer

    Key elements if the contract

    Conclusion

    1. Other examples (list)

    Boxes:

    Queen Elizabeth II Bridge

    Croydon Tramlink

Royal Berkshire hospital - acute service retionalisation

South Kent Hospital - waste disposal

South Tees - dialysis service

DSS Netcastle Estate

Castle Court, CaeWhilly

English Partnerships

-Written

-Barking Reach

University of Greenwich - residential accommodation

Chapter 5:
Managing a PFI project

Planning phase

Clarifying objectives

Chart: The PFI project management process

Outline business case

Assembling the project team

Procurement process

Specification of requirements

Chart: Quality/cost trade-off

Bid appraisal and award of contract

Timetable complications

Contract management

Chapter 6:
Key contractual issues

Contract length and transfer of assets

Payment structures

Chart: Cost and quality improvements

Contract termination

Supplier default

Supplier insolvency

Public sector default

Public sector change of status

Voluntary termination

Supplier equity and control

Force majeure

Change control and dispute resolution

Indemnities and insurance

Other issues

Annexes:
A to C

Annex A: Joint ventures

Annex B: The accounting treatment of PFI projects

Annex C: EC procurement rules

List of abbreviations

Other relevant publications

List of contact