Private Finance Initiative (PFI) Relationships

Private Finance Initiatives (PFIs) are long term contracts with private firms that complete, manage and up-front finance public sector projects. Primarily used for infrastructure, such as building and equipping of schools, hospitals, transport systems, water and sewerage systems.

What should you expect from Private Finance Initiatives?

  • Greater operational efficiency. A PFI can let you focus on core activities. Operated correctly, a PFI can; save costs, promote efficiency, help you keep operational control, offer staffing flexibility, provide continuity and risk management, and lets you develop internal staff. Done successfully, it can significantly increase the shared risk and benefits when developing innovation, agility and effectiveness of the services provided.

Benefits of using BPG to facilitate your Private Finance Initiative Relationship

  • We know what practices work really well. Having optimised over 500 complex supplier relationships, we have deep expertise of trust building in relationships, proven processes and templates, along with expertise in what actions you need to avoid to make sure your PFI relationship achieves your outcomes, quickly.

What BPG delivers

  • Maximum value in your relationshipWe help you make sure your PFI relationship is optimised, both operationally and contractually. We have specific processes to examine both the performance of PFI contractors, and that the financial, governance and contract terms can be reshaped to provide much better value for all concerned, without the risk of disputes arising.

Why BPG’s process is so important

  • A stable relationship promotes innovationOur ‘Optimise’ process will drive great behaviours between you, TopCo (SPV) and the prime contractor to improve service performance, reduce BAU costs and drive on-going maximum value.

Considerations of PFI Relationships

How does a PFI operate?

  • The Private Finance Initiative (PFI) is a complex project procurement method that uses private sector investment in order to deliver public sector infrastructure and/or services according to a specification defined by the public sector.
  • It was derived as a sub-set of a broader procurement approach under the structure of a Public Private Partnership (PPP).
  • The main characteristic being the use of private sector project finance, debt and equity, but underwritten by the public sector, in order to deliver a series of public services.
  • These private sector companies also usually operate these services, sometimes using former public sector staff.

What challenges typically arise?

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.

Foundations for Success

  • PFIs are very complex beasts both contractually and operationally. They can work really well, but you’ll often find there are significant premiums to pay for key projects, services and financing.
  • Significant cost and performance improvements are available through understanding the detailed complexities of how the value for money structures operate within the contract and an understanding of how recent case law can work in your favour.

Our ‘Optimise’ process can often help get you into a better place, quickly.

Some examples of PFI Relationships we support you to optimise

  • NHS; Hospital Buildings, Hard/Soft FM Services, Medical Equipment
  • Local Authorities; Leisure Centres; Highways Maintenance; Schools (BSF)
  • Ministry of Defence; Garrisons, Tanker Aircraft
  • Emergency Services; Police, Fire, Ambulance

A few of the SPVs and PFI contractors we have knowledge of

  • 3i Group Plc
  • 3i Infrastructure Plc
  • Aberdeen Sidecar Lp Inc.
  • Aecom
  • Ahli United Bank Bsc
  • Airbus Se
  • Allianz Se
  • Amber Infrastructure Group Holdings Ltd
  • Anchor Trust
  • Aster Group Ltd
  • Aviva Plc
  • Babcock International Group Plc
  • Bae Systems Plc
  • Balfour Beatty Plc
  • Bam Ppp Pggm Infrastructure Cooperatie U.A.
  • Bank of Ireland Group Plc
  • Bbde Orbital Holdings Llp
  • Bbgi Sicav S.A.
  • Bell Rock Topco Ltd
  • Biffa Plc
  • Brent Lighting Ltd
  • Brookgate Limited
  • Broomco (3857) Ltd
  • Bt Group Plc
  • Cae International Holdings Ltd
  • Canadian Imperial Bank of Commerce
  • Capita Plc
  • Cardale Pfi Investments Limited
  • Carden Croft & Co Ltd
  • Care UK Community Partnerships Ltd
  • Care UK Health & Social Care Holdings Ltd
  • Carillion Plc
  • Carnbane Estates Ltd
  • Civis Pfi/Ppp Infrastructure Cihl Holdings Ltd
  • Clugston Pf Ltd
  • Colas Sa
  • Community Health Partnerships Ltd
  • Compass Minerals International, Inc.
  • Costain Pension Scheme Trustee Ltd
  • Dalmore Holdings Ltd
  • Depfa Bank Plc
  • Derwent Housing Association Ltd
  • Dexia Sa
  • Dif Infra 3 Cooperatief U.A.
  • Dif Infrastructure Ii B.V.
  • Dif Infrastructure Iv Cooperatief U.A.
  • Dif Infrastructure Yield I Cooperatief U.A.
  • Drumglass Holdco Ltd
  • E.On Se
  • Electricite De France Sa
  • Engie
  • Equitix Ltd
  • Equitix Ma 1 L.P.
  • Fairlake Properties Ltd
  • Fcc Medio Ambiente Sa
  • Ferrovial S.A.
  • Fms Wertmanagement Anstalt Des Oeffentlichen Recht
  • Fomento De Construcciones Y Contratas Sa
  • G4s Plc
  • Gc Rieber Shipping As
  • General Commercial Agencies Ltd
  • Grainger Plc
  • Hadley Shipping Group Ltd
  • Healthcare Technologies International Plc
  • Henry Boot Plc
  • Hicl Infrastructure Co Ltd
  • Honeywell International Inc
  • Hsbc Bank Plc
  • Hyde Housing Association Ltd
  • Iberdrola S.A.
  • Imperglio International Infrastructures N.V.
  • Infrared Capital Partners (Management) Llp
  • Innisfree Group Ltd
  • Interserve Investments Ltd
  • Invest Northern Ireland
  • Ipfi Financial Ltd
  • Iron Mountain Inc
  • Island Roads Investment Ltd
  • James Walker (Leith) Ltd
  • John Graham Holdings Ltd
  • John Laing Infrastructure Fund Ltd
  • Jura Acquisition Ltd
  • Kajima Corporation
  • Kelda Holdings Ltd
  • Kellogg Brown and Root Inc
  • Kent Community Partnership Ltd
  • Knowle Park Ltd
  • Koninklijke Bam Groep Nv
  • Koninklijke Philips N.V.
  • Lagan Construction Group Holdings Ltd
  • Laing O’rourke Plc.
  • Law Debenture Corporation Plc (The)
  • Leonardo S.P.A.
  • Line Nominees Ltd
  • Little Duty Ltd
  • Lloyds Banking Group Plc
  • Lockheed Martin Corp
  • Mapeley Ltd
  • Meridiam Infrastructure Net Sarl
  • Morgan Sindall Group Plc
  • Motorola Solutions, Inc
  • Mvv Umwelt Gmbh
  • Newbury and Thatcham Hospital Building Trust
  • Nibc Bank Nv
  • Norddeutsche Landesbank – Girozentrale
  • Northern Trust Corporation
  • Oldham Retirement Housing Partnership Ltd
  • Pennon Group Plc
  • Peregrine Holding Company Ltd
  • Prudential Plc
  • Quadrant Group Ltd
  • Renewi Pfi Investments Ltd
  • Sanctuary Housing Association
  • Sec Highway Lighting (No.4) Ltd
  • Semperian Ppp Investment Partners Holdings Ltd
  • Severn Trent Plc
  • Sewell Group Ltd
  • Shukco Ltd
  • Skanska Ab
  • Sodexo
  • South Yorkshire Housing Association Ltd
  • Sovereign Housing Association Ltd
  • Standard Life Aberdeen Plc
  • Stepnell Holdings Ltd
  • Suez S.A.
  • Sumitomo Mitsu Financial Group, Inc
  • Swan Housing Association Ltd
  • T and I Ltd
  • Telereal (London Wall) Ltd
  • Thales Sa
  • Thames Valley Housing Association Ltd
  • The Co-Operative Bank Plc
  • The Eric Wright Charitable Trust
  • The Land Group (Suffolk) Ltd
  • The Riverside Group Ltd
  • The Royal Bank Of Scotland Group Plc
  • The United Healthcare Land Company Ltd
  • Titanic Property Development Ltd
  • Together Housing Group Ltd
  • Tstar Pinnacle Ltd
  • Turkington Holdings Ltd
  • Turner and Co. (Glasgow) Ltd
  • United Medical Enterprises Group Ltd
  • Urbaser Ltd
  • Veolia Environment
  • Vinci
  • Windsor and District Housing Association Ltd
  • Yorkshire Housing Ltd
  • Your Housing Group Ltd
  • YTL Power International Berhad

What stage are you at in your Private Finance Initiative (PFI) Relationship?

New Relationship

You’re procuring or contracting and you need it to work really well.

Existing Relationship

You’re in a partnership that could be working better.

Broken Relationship

It’s gone wrong. You need help to exit a relationship early and safely transition to another.