102. A fundamental aspect of PFPs is that the builders will also be contracted to maintain the building over 25-30 years. This encourages the contractor to put up a more durable building, requiring less maintenance over its lifetime. With lower maintenance costs the contractor can make higher profits.
103. Most witnesses agreed PFPs led to better maintenance than had been the case under traditional procurement (for example see NAO p 90, International Project Finance Association p 316). Previously, under traditional procurement, a contractor put up a building and there was usually no further involvement. So the contractor did not have an incentive to build an asset that required little maintenance.
104. Furthermore, under PFPs, maintenance which the private contractor provides is ring-fenced for the length of the contract and funded by the public sector. The NAO reported: "PFI provides a contractual guarantee that the public client will fund the ongoing maintenance of the building" (p 90). In the past, using traditional procurement, maintenance was not ring-fenced. So maintenance was often cut when public sector budgets were squeezed: (Sir John Gieve Q 214, Ms Susan Anderson, CBI, Q 149). According to the NAO having maintenance ring-fenced under private finance projects ensures problems are not left to fester which might otherwise cause damage requiring more expensive work to be undertaken later (p 90).