24.1.1 The Authority will often be contracting with a Contractor which is a SPV with no track record of service delivery and whose main asset is the Contract. The Authority will therefore require comfort that the Contractor and its Sub-Contractors will be able to meet their contractual obligations to provide the Service and any corresponding financial liabilities.
24.1.2 In a traditional procurement, such comfort would normally take the form of guarantees, indemnities and collateral warranties to the Authority provided by the principal Contractor, its parent company and Sub-Contractors. Under PFI, where the majority of projects are financed on a limited recourse basis and the Contractor is not paid if the Service is not delivered, such extensive direct comfort will not normally be necessary or appropriate.
24.1.3 The Authority will, however, require certain types of comfort from the Contractor. This Section advises on the type of comfort the Authority should normally expect.