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FAQs |
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Do PFI projects cost more than public sector borrowing?
The cost of capital in PFI projects is higher than the cost of general public sector borrowing because of the risks which are transferred. Nonetheless, PFI offers the public sector substantial advantages in passing on the whole-life costs of the project. In particular, it successfully eliminates (from the public authority's standpoint) the risks of time and cost over-run, which have historically been major problems in public procurement.
What is the structure of a PFI contract?
A typical PFI contractual structure is outlined as follows, although there are considerable variations possible:
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