| Deductions applied by a Procuring Authority because an area or service is unavailable. Services which are classified as availability are indicated within the services specification. | |
| The process by which an Authority develops a payment mechanism to incentivise a private sector provider to deliver services to a pre-agreed standard. The required service standards are recorded within a services specification detailing each service to be provided and a priority level. The calibration exercise determines the level of deductions which will be applied in the event that services are not provided to the required standard. Deductions can be made for poor performance (for example, buildings are not clean) or unavailability (for example, space is unavailable due to flooding). | |
| This holds the financial data for the project over the construction and operational period. It indicates the forecast unitary charge based upon certain economic assumptions regarding forecast inflation. The financial model is agreed at financial close. | |
| A term referring to a payment mechanism which has not been fully calibrated and includes a performance failure which can trigger consequences far in excess of its significance. For example, repeated unavailability of a store cupboard could trigger whole service unavailability. | |
| The level at which the unitary charge inflates each year. This is likely to be expressed as a percentage of the movement in either the Retail Price Index or the Consumer Price Index. | |
| The successful private sector consortia who are providing the PPP facilities and services. A typical PPP contractor would include: o a SPV or ProjectCo who was responsible for managing and administering the contract. The SPV would receive the funding from the senior debt provider (either a bank providing a senior term loan or a bond) and the subordinated debt and equity from the project sponsors. o a building subcontractor who would be responsible for the construction works and snagging. o a FM subcontractor who would be responsible for providing the hard and soft FM services and may also be responsible for providing the lifecycle maintenance. Lifecycle maintenance can also be provided by the SPV procuring separate contracts for this. | |
| Deductions applied by a Procuring Authority because a service was not delivered to the standard specified within the services specification. The services specification indicates the priority level associated with that particular service and the amount of the performance deduction will reflect the service priority and the number of service failures in a given period. | |
| An example of a hair trigger which can result in a significant penalty deduction far in excess of the significance of that service failure. | |
| This is the period by which a reported fault has to be rectified. Rectification Periods can be split into temporary and permanent rectification periods. A temporary rectification period means an initial solution needs to be found to address a service failure within a specified period of time. A permanent rectification period needs to be met to ensure the service failure is rectified fully. For example, a temporary rectification of some graffiti may be covering the wall affected whilst the permanent rectification would be making good the wall's surface and presentation to the standards specified within the services specification. A PPP Contractor may be given a 3 hour temporary rectification period for this and a week's permanent rectification period.
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| This is a detailed document recording the service standards required by a Procuring Authority. It details: o the services to be provided, o the standards at which those services should be provided, o the rectification periods available to the PPP contractor to rectify any failures in those service standards o whether service standards are considered to relate to availability or performance. It therefore indicates the applicable deduction in the event of poor performance. o For performance failures indicates the priority attached to that service. This in turn influences the level of deduction. | |
| This refers to the process where there are preagreed variations in the profile of the unitary charge. These may reflect periods where substantial lifecycle maintenance is expected and the unitary charge is profiled so that the Procuring Authority pays more during these periods in order to maintain the repayment provisions for the bank. | |
| This is the Special Purpose Vehicle which is formed by the PPP Contractor. It is the company which enters into the PPP contract with the Authority; enters into sub-contracts which construction and FM contractors and enters into the funding arrangements. |