SoPCNI 3 updates the guidance in essentially the same manner as SOPC4 does for the remainder of the UK, to take into account new legislation and developments in the PFI market together with providing further guidance on, among other areas:
• Price and Payment Mechanisms (Section 7);
• Changes in Service (Section 13);
• Price Variations (Section 15);
• Change of Ownership (Section 18);
• Authority Break Points (section 21.5.4);
• Information Provisions (Section 26.2);
• Contractor Distress (Section 35);
• Bond Finance (Section 36); and
• Corporate Finance (Section 37).
Additionally, and specific to Northern Ireland, Annex 1 (providing drafting for Criminal Damage Events) has been amended to reflect experience on recently completed deals. Further details of the main changes made from SoPCNI 2 are set out in the accompanying draft summary paper "Standardisation of PFI Contracts, Northern Ireland Version 3 - An Outline of Principal Changes".
Additionally, SOPCNI 3 incorporates the revised guidance on Refinancing provisions issued by HMT in October 2008.
The application of the revised guidance is mandatory for all PFI projects that are still in competitive procurement (i.e. where final bids have not yet been received or the competitive dialogue not yet been closed) on or after January 2009. The guidance is therefore not mandatory for those PFI projects at preferred bidder or where final bids are received before January 2009. However, adoption of the revised guidance and adherence to the principles contained therein is encouraged for those projects where its use is not mandatory.
The approval and derogation process is set out in the Appendix to this note.
Authorities should note in particular the amendments to Section 13 (Change in Service) of SOPCNI 3. Further guidance on variations has been provided. The required drafting in SOPCNI 2 relating to Change in Service at clauses 12.4, 12.5 and 12.6 is no longer required. Instead, Authorities must develop a project specific Change Protocol that complies with the principles set out in Section 13 (Change in Service). These contractual principles constitute a "Core Area" for the purposes of the derogations process, and therefore each project to which SoPCNI 3 applies must include a Change Protocol.