A public sector body that lets a PFI contract including a government department, local authority or other public or statutory body. | |
Arrangements under which an authority receives refunds or reductions in future unitary charge payments, in certain circumstances. | |
A procurement for a contract in which a public sector customer, using government finance, pays a contractor as the works progress. Such projects are substantially paid for on completion. The public sector may face greater risks of delay and cost overrun and retains the risk that the assets will not perform once accepted, including in relation to whole life of asset costs. The provision of services, and operation and maintenance of the resulting assets, are dealt with in separate contracts. | |
A party that has contracted with the Government, a local authority or other public or statutory body to provide services under a PFI contract. | |
The percentage rate applied to cash flows to enable comparisons to be made between payments occurring at different times. The rate quantifies the extent to which a given sum of money is worth more to the recipient today than the same amount in a year's time. | |
The value of a company or project after all liabilities have been allowed for. The equity is owned by the shareholders. | |
The first major PFI project to be refinanced and the subject of an NAO report. | |
Spreadsheets designed to show the financial outcome of a particular set of estimated costs, revenues and fixed and capital charges for delivering a service over time. | |
Fazakerley Prison Services Limited: the consortium company - set up and owned by Tarmac (now Carillion) and Group4 - that has entered into the contract for the Fazakerley prison with the Prison Service. | |
A Gateway review is conducted by independent experienced practitioners before key decision points in the life cycle of a procurement project. It is designed to be applied to projects that procure services, construction/property, IT-enabled business change projects and procurements using framework contracts. | |
An additional amount that a bank charges on a commercial loan over and above its own cost of providing the loan. The margin serves to provide the bank both with a profit and with compensation against the risk of not having the loan repaid. | |
A formal communication to selected suppliers. | |
A defined term in the contract between a contractor and an authority which, in certain circumstances, determines the amount of compensation payable by the authority to the contractor in the event that the contract is terminated prematurely. | |
The date by which the last instalment of principal is due so that a loan is repaid in full. | |
A policy introduced by the Government in 1992 to harness private sector management and expertise in the delivery of public services, while reducing the impact of public borrowing. | |
Accounts set up by a contractor containing cash balances earmarked to meet future liabilities as they arise, such as cost overruns on the construction of a prison or future major maintenance programmes or debt-servicing requirements. | |
The process by which the terms of the funding put in place at the outset of a PFI contract are later changed during the life of the contract, usually with the aim of creating refinancing benefits for the contractor. | |
The benefits to shareholders of increasing and/or bringing forward their returns from a project as a result of changes to a contractor's financing structure. | |
The net present value to a contractor of a contract, at a particular date, reflecting i) the profits projected to be made by the contractor during the unexpired term of the contract; and ii) any residual value of contract assets in which the contractor retains an interest after expiry. | |
Payments made by a contractor to its shareholders in the form of dividends, interest on subordinated debt and repayment of subordinated debt principal. | |
Debt that, in the event of bankruptcy, must be repaid before subordinated debt receives any repayment. Senior debt lenders have the highest-ranking claim over the assets of a contractor compared with all other lenders and investors. | |
Debt over which senior debt takes priority. In the event of bankruptcy, subordinated debt lenders receive payment only after senior debt is paid off in full. | |
The amount of compensation payable by the authority to the contractor in the event of early termination of the contract, such amount depending upon the circumstances giving rise to termination. | |
Achievement of the optimum combination of whole-life cost and quality to meet a customer's requirements. | |
The periodic payment due from an authority to a contractor in respect of the provision and operation of a service under a PFI contract. |