In order to strengthen the partnership between the public and the private sectors, the Government will act as a minority equity co-investor in projects. The public sector equity investment will be carried out by a new Central Government Unit located within HM Treasury, staffed by commercial experts, and independent of the procuring Authority.
The public sector equity investor will have the same, or similar, rights as the private sector equity investors, and their relationship will be enshrined in a Shareholders Agreement. The public sector investor will appoint directors to the board of the project vehicle, which will manage the PF2 project. These directors will, like all directors, owe fiduciary duties to the company.
This new collaborative approach will align interests and foster a better understanding between the public and the private sector PF2 partners. It is anticipated that this will help improve a project's performance and handling of risk, as the public sector will be involved in the strategic decisions for the management and operation of the Company. Value for money should also be improved as the public sector will share in the equity returns of successful projects thereby reducing the overall cost of the project to the public sector.