2.4.1 The following assumptions apply to the guidance, unless otherwise indicated:
• the party contracting with the public sector is a special purpose company4 with Sub-Contractors providing the actual performance on its behalf;
• the project involves some development or a construction phase, followed by an operational phase during which the Service is provided; and
• the project is wholly or partly financed by limited recourse debt.
2.4.2 These assumptions are relevant because: (a) that is how many PFI/PF2 transactions are structured and (b) such a contractual structure is inherently complicated and thus large parts of the guidance will be particularly helpful to users.
2.4.3 Use of these assumptions does not mean however that one financial structure is preferable to another. The suitability of various structures, including trade-offs between cost, complexity and risk, form part of the public sector's overall appraisal of bidders' proposals. Accordingly, no conclusion may be drawn in advance of such appraisal as to which form of financial structure is most appropriate. For guidance on corporate finance funding see Section 30 (Corporate Finance).
2.4.4 Where a project does not fall within the standard assumptions in Section 2.4.1 above adjustments will be needed to required drafting provisions and Authorities should seek guidance at an early stage.