Under the current PFI model, maintenance of the asset is the responsibility of the private sector, to deliver the required contract services and to meet agreed end of project life asset hand back conditions. The whole life costs are set (subject to indexation) at the project outset. The cost of hard facilities management and lifecycle maintenance requirements is therefore a risk that is transferred to the contractor, underpinning a principle of optimising whole life asset design and maintenance efficiency. In some cases, the contractor passes lifecycle risk through to a sub-contractor and, in other cases, this risk is retained by the project company and its investors.
SoPC4 allows the public sector visibility of the contractor's forward work plan each year. However, this is designed to help fit construction work around public sector access to the asset rather than to scrutinise the level of investment and make changes to the work plan. Critics of
the PFI model have observed that a lack of transparency of lifecycle maintenance investment means that the public sector does not have confidence in the value for money of this aspect of risk transfer.
Question 32: Under the current PFI model, how effectively has the party who holds hard facilities management and lifecycle risk been able to price those risks? Question 33: Reflecting on the long term nature of the contracts and changing user requirements as well as changing approaches in maintenance contracts, for example improvements in technology that drive greater efficiency, how could the public sector have better confidence in the ongoing value for money achieved from hard facilities management and lifecycle risk transfer? |