2.4 Public sector co-investment provides greater project transparency and accountability for project delivery and operation. Through project company board membership at Director level, the public sector will now be able to participate in project governance with the project company's other Directors who will be appointed by the equity providers. This is expected to result in better partnership working between the public and private sector as the public sector will have greater visibility of project information and will be involved in strategic decision making.
2.5 This approach will also help to address concerns around a lack of transparency of financial information related to project performance as the public sector will receive this information in order to make necessary decisions as a Director on the project company board.
2.6 In addition, observer status at board meetings of the project company will be given to the procuring authority or other local representative as appropriate: for example, a school where it is not also the procuring authority. The intention is to support better collaboration, sharing of information and perspectives; and to improve transparency. The observer will help to ensure the project company board understands local issues and concerns, which will support the effective management of the project through better partnering. The governance arrangements for the project vehicle set up to implement the project will be set out in a standard Shareholders' Agreement, a draft of which will be published for consultation shortly. For further details please see Chapter 5 of Standardisation of PF2 Contracts.
Box 2.B: The Shareholders' Agreement The Shareholders' Agreement sets out the governance arrangements for the vehicle set up to deliver the project. For each project in which the public sector is participating as an equity investor, the Shareholders' Agreement is expected to be standardised, based on a draft to be published for consultation shortly. In summary, the proposed Shareholders' Agreement will set out: • the parties who are shareholders in the project vehicle created to implement the PF2 project; • how equity return distributions will be determined; and • the right of the public sector equity provider to appoint a local level observer to the Board. |
2.7 Project and financial information, including that on equity holdings and investor returns in relation to individual projects, will be disclosed through an annual report published by the Treasury.