Part One
Costs and benefits of private finance procurement
1.1
This part sets out the rationale, benefits and costs of the Private Finance Initiative (
PFI
).
More Information
Private finance for public sector projects
Potential benefits of PFI
Construction costs
Operational efficiency
Asset quality and maintenance
Private finance can be attractive to government in the short- to medium-term and may be public bodies' only option for investment
There are additional costs and challenges associated with private finance procurement
Flexibility
Cost premium for risk transfer
Overall performance of PFI has not been quantified
The VfM assessment process favoured PFI
Cash flow timing and discount rate
Other adjustments
Withdrawal of VfM assessment